Under Armour said it has no plans to enter athleisure, will focus on growing full-price stores

Key Points
  • Under Armour's CEO said the company is focusing on performance instead of athleisure.
  • It also plans to have up to 2,500 stores open by the end of 2023 and focus on making more of them full-price locations.
  • Tariffs will have minimal effects on the company, as 10% of its U.S. goods are sourced from China, it said. 
Under Armour's Kevin Plank and Patrik Frisk on the company's turnaround

Under Armour, which has been struggling to stabilize sales in North America, said that it doesn't see jumping into the growing athleisure trend as a way to pull in customers.

"We've identified our consumer as something called the focus performer. That is a mindset that the consumer has," CEO Kevin Plank said on CNBC's "Squawk Box" Thursday. "That means that when they're thinking about what they wear and what they do with Under Armour ... It's all performance."

According to data from A.T. Kearney, the athleisure market is expected to reach $83 billion in the U.S. by 2020 and $350 billion globally. But Under Armour indicated it wanted to stay away from the trend and instead focus on adding value to the brand with innovative products.

Innovation is also a key component of the sportswear retailer's five-year growth plan to improve sales in North America. The plan includes having up to 2,500 stores by 2023. In December, it operated around 1,100 locations.

Under Armour's President and Chief Operating Officer Patrik Frisk emphasized that the company is just two quarters into the 2023 plan. The company also recently appointed a new North American president.

Under Armour said that part of the turnaround plan is to open more full-price, direct-to-consumer stores in North America. Currently, about 90% of its North American locations are outlet stores.

"We believe that's one way to drive our innovation. The consumer's able to come into a store like this and see the innovation that we're driving. We're going to couple that with great messaging and becoming a louder brand," said Frisk.

In addition to focusing on direct-to-consumer, Under Armour is also a first-party seller on Amazon. "Our job is to understand how the consumer moves through the purchase journey, and today, certainly, most searches start on Amazon, so it's important for us to be there," Frisk said.

Executives said that the company is feeling minimal effects from the tariffs on Chinese goods, and that consumers shouldn't expect to see price increases.

"With the current tariffs, we're not actually being affected very much at all, we only have about 10% of what comes into the U.S. from China, so in the current state, we're okay," Frisk said. The company has also figured out other tactics to reduce the impact of the additional taxes.

The stock has rallied 21% since January, bringing the company to a market value of around $9 billion.