Shares of Under Armour (UA,UAA) are trading lower as the company announced that previous CEO Kevin Plank, who stepped down in 2019, will once again take up the mantle of chief executive. He will replace current CEO Stephanie Linnartz, ending her three-year turnaround plan. Questions around what Plank can do to turn around what is perceived by some to be, in part, the mess he made, now arise.

Morningstar Equity Analyst David Swartz joins Yahoo Finance to discuss the change in leadership, the challenges the company faces in the market, and what Plank needs to do to turn things around for the sports apparel brand.

Swartz elaborates on what the top priority for Plank should be: "I think the number one top priority has to be to try to build the brand into something a little bit stronger than it is today. That could be done through differentiation of product by channel. Right now, Under Armour does not do a very good job at all of differentiating its products so that the stuff that Under Armour sells at Kohl's (KSS) is not that much different than what it sells at a store like Dick's Sporting Goods (DKS). And Under Armour needs to have stronger products, especially in footwear."

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Editor's note: This article was written by Nicholas Jacobino

Video Transcript

JARED BLIKRE: Just thinking about the broader challenges that Plank faces now as coming back to Under Armour, how does he-- is this something you write about-- you're writing about in your most recent research report, that how do they broaden-- how does he broaden Under Armour appeal, especially internationally in certain locations where they've really flagged.

DAVID SWARTZ: Yeah, Under Armour still does about 2/3 of its sales in North America, which is quite a bit higher than competing companies like Nike and Adidas and Puma. Under Armour just does not have the geographic diversity. And it's missing out on growth and markets like China, where it's still relatively small, and which is really supposed to be a high growth area for sportswear. And so Under Armour does need to expand outside of North America.

I don't know, though, that Kevin Plank really intends to do that. I think he's probably more concerned right now about trying to get the sales up in North America. Besides geographically, Under Armour also needs to expand in other categories. The women's sales that Under Armour lagged men's by quite a lot.

And as we've seen with the success of brands like Lululemon, it's definitely necessary to have a very strong women's business to be competitive in activewear anymore. It's a bit disappointing that Under Armour just released one of the few female CEOs in the industry. You wonder then, will they have the same commitment to the women's business that we've heard from the company in the past. So Under Armour really does need to expand from its traditional roots in football into other sports, other categories, and other geographies.