What?s happened to discretionary spending? Local stocks connected to consumer buying tell the story.
Since the beginning of the year, Baltimore-based Under Armour has seen its stock price slip 16 percent. Its share price closed Friday at $36.68, while its 52-week high was $73.40 a share.
Despite the drop in stock price, Under Armour founder and Chief Executive Officer Kevin Plank recently showed his confidence in the company?s ability to continue to sell athletic shirts, shorts and shoes.
Plank voluntarily cut his 2008 salary from $500,000 to $26,000 ? the amount he made in 1996 when he founded the company ? according to a March 21 filing with the Securities and Exchange Commission.
According to the company?s proxy statement filed with the SEC, Plank “believes he should be compensated for his services based primarily on [the] company?s performance.” Under Armour?s compensation committee set the maximum for that bonus this year at $1.47 million ? which equals Plank?s $1 million maximum 2007 bonus plus the $474,000 pay cut.
Another Maryland company, Hampstead-based Jos. A. Bank Clothiers, saw its stock price fall 22.9 percent from the beginning of the year, closing Friday at $21.93 a share. Its 52-week high was $46.16 a share.
Towson-based Black & Decker?s stock price has fallen 5.7 percent since January, ending Friday at $65.47 a share. Its 52-week high was $97.01 a share.
“It?s been pretty dismal since November,” said Tom Saquella, president of the Maryland Retailers Association. “I don?t think it?s going to get better anytime soon.”
The Commerce Department said Friday that consumer spending edged up by just 0.1 percent last month, the poorest showing since September 2006. If the effects of inflation are removed, spending was flat in February, the third consecutive month of sluggish activity.
All in all, it?s not encouraging news for retail companies or their shareholders.
“We think the difficult economic environment will persist at least through the year and that consumers will continue to be more cautious in their spending,” Kimberly Picciola, a Morningstar analyst, wrote in a note Friday. “Even consumers who haven?t been directly affected by falling home values or job losses are taking a more cautious eye to their spending.”
Under Armour is part of The Examiner Top 10, a portfolio of some of the largest publicly traded companies with a significant presence in the Baltimore region.
