A new year will bring a new CEO to Under Armour.
In a surprise announcement, Kevin Plank, who founded the company in 1996 while still in college, announced Tuesday he is stepping down as CEO. He will be replaced by Chief Operating Officer Patrik Frisk, effective Jan. 1. Frisk will also join the board, while Plank transitions to executive chairman and brand chief.
"Patrik is the right person to serve as Under Armour's next CEO," the 47-year-old Plank said in a statement. "As my partner during the most transformative chapter in our history, he has been exceptional in his ability to translate our brand's vision into world-class execution by focusing on our long-term strategy and re-engineering our ecosystem through a strategic operational and cultural transformation."
Under Armour shares were up more than 4% by Tuesday afternoon.
Frisk joined Under Armour in July 2017 from his position as CEO of Aldo Group. There, like at Under Armour, Frisk worked under a legendary founder, Aldo Bensadoun. Prior to Aldo, Frisk held various leadership positions at VF Corp.
He has been a key part of Baltimore-based Under Armour's three-year transformation plan. On the most recent earnings call, he listed "lengthy achievements" the athleisure company has logged so far, including optimizing the supply chain and defining the target customer.
However, a big part of Frisk's focus has been revitalizing North America for the brand, which has not yet returned to growth. North America revenue fell 3.2% in its fiscal second quarter, which it reported in July. The company forecast a "slight decline" in the region's sales for 2019. Previously, the company expected North American sales to be "relatively flat."
"The opportunity that lies ahead of us is incredible," Frisk said in the announcement. "As our entire global team continues to lean hard into our transformation, I am honored to lead this great brand toward the realization of its full potential."
Also in early September of this year, Stephanie Pugliese joined Under Armour as its new North American president. Pugliese was previously CEO of Duluth Trading Company.
Often joining Plank for interviews since arriving at Under Armour, Frisk has been the heir apparent, though the timing of the transition has not previously been made public.
There have been a number of Under Armour executive departures in recent years including Kerry Chandler, chief human resources officer, in October 2018. Chief Merchandising Officer Henry Stafford and Chief Digital Officer Robin Thurston left in 2016.
Some critics have called for executive changes in recent years after its disappointing performance coupled with unflattering news reports about its work culture. Last year, The Wall Street Journal reported strip club visits were allowed as work-related expenses, while reports surfaced citing some female and minority employees felt passed over for promotions or otherwise left out of the company's competitive culture.
The company ended the practice of allowing employees to expense visits to strip clubs in early 2018, and sent a statement to the Journal last November that said it "can and will do better."
Plank founded the company while he was working out of his grandmother's basement. He took it public in 2005 and remains an active CEO inside and outside the corporate walls.
Plank is an identifiable face of the brand, often appearing at events with sponsored athletes or other prominent executives like Richard Branson, as part of Under Armour's partnership with Virgin Galactic for new spacesuits just last week.
With Plank holding the executive chairman and also the brand chief titles, he will likely remain very involved in the larger direction of the company, while leaving the daily operational details to Frisk.
Under Armour's brand has largely been associated with performance attributes, but many consumers have been buying athletic wear to run errands around town. This shift toward fashion has helped rivals such as Nike, Adidas and Lululemon.
As of Monday's close, Under Armour shares were up nearly 14% this year. The company has a market value of $9.1 billion. By comparison, Lululemon shares, which have a market value of $26.7 billion, have gained nearly 69%, while Nike, valued at $150.2 billion, has gained nearly 30%.
— CNBC's Lauren Thomas contributed to this reporting.