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Dick's Sporting Goods' CEO just called out Under Armour's worst mistake (DKS, UA)

Under Armour's expansion into more retailers has hurt Dick's Sporting Goods.

  • In its most recent earnings call on Tuesday,
  • Under Armour is now selling its wares at more retailers but without much difference in product, which the company has said it's working on fixing.
  • Ultimately, Dick's CEO Ed Stack said he thinks Under Armour will "come back."

Dick's Sporting Goods specifically called out Under Armour in its latest earnings call on Tuesday.

While the retailer saw growth in brands like Adidas and Patagonia, it was "

"The broader distribution ... definitely had an impact and I think it's going to continue to have an impact until segmentation is done," Stack said.

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Analysts have for months been concerned about segmentation as Under Armour has expanded the stores it sells in, including Kohl's, DSW, and Famous Footwear.

Kohl's was a particular sticking point. While sales are up, the fear is that the same kind of product being offered at a discount at Kohl's negates the reason to go to a more high-end store like Dick's.

Sports-focused retailers like Dick's are now planning on stocking less Under Armour product, Sam Poser of Susquehanna Financial wrote in a note to investors earlier this year. According to Poser, they'll instead be prioritizing stores' own private-label brands.

Still, Stack said he has confidence that Under Armour will "come back," and is aware of the issues plaguing the brand.

"[Under Armour CEO] Kevin [Plank] and his team are really focused on fixing the business," Stack said. "They have to work on their segmentation, which they are working on."

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Under Armour COO Patrik Frisk said in its February earnings call that the company is "strategically managing" to better segment its products.

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