Shelly Banjo is a Bloomberg Gadfly columnist covering industrial companies and conglomerates. She previously was a reporter at Quartz and the Wall Street Journal.

Under Armour Inc.'s Donald Trump problem goes beyond CEO Kevin Plank's effusive praise of the president.

The real issue is that Plank, who controls the majority of voting rights, is going against what's in the best interest of the public company he founded.

The Mighty Are Falling
Under Armour's shares have dropped nearly 50 percent since its all-time high in 2015
Source: Bloomberg

Some Plank comments in a CNBC interview earlier this month, that Trump is "pro-business" and a "real asset," drew ire from customers and big-name endorsers. Those included ballet dancer Misty Copeland and basketball star Stephen Curry, who pretty much single-handedly helped Under Armour build a $1 billion sneaker business. Curry said he would consider cutting ties with a company not aligned with his "core values." 

Susquehanna analyst Sam Poser, who recently downgraded the stock to a "sell" equivalent, likened the fallout to what happened after Lululemon Athletica Inc. founder Chip Wilson said the yoga-gear maker's pants "don't work" for certain women. A group of customers stopped shopping there, and sales growth at established stores decelerated from 16 percent in 2012 to 4 percent in 2013. 

The noise got so loud that Plank took out a full-page newspaper ad on Wednesday assuring the athletes, employees, and his customers, that they shouldn't equate his comments praising Trump's economic policies with the president's views on more-controversial measures, such as the now-frozen executive order on immigration. "We are publicly opposing the travel ban," Plank wrote in the ad Wednesday. 

The ad was a good PR move. But Plank does not seem to realize Under Armour has a lot to lose from Trump's economic policies, too -- most notably his desire to punish companies that make goods overseas and sell them in the U.S.

While almost all retailers will suffer from a border-adjustment tax (BAT), which levies fees on such companies, Under Armour is among those that stand to lose the most. 

Here's why: The BAT would hit companies hardest that make most of their money in the U.S., but most of their goods abroad. (Stuff made outside the U.S. and sold abroad wouldn't incur the tax.) Under Armour generated 89 percent of its sales in the U.S. last year, but virtually all its products are manufactured in 16 countries abroad, according to company filings. By contrast, Nike gets 48 percent of its revenue from North America, according to an analysis by Cowen & Co. 

American Dependence
Under Armour makes the majority of its sales and operating income from the U.S., despite making most of its products overseas
Source: Bloomberg

As it is, Under Armour's business is already hurting from declining shopper traffic and increased discounting. 

Under Armour has said its focus is on "policy, not politics." If that's the case, then why wouldn't Plank want to align with policies that help his company, rather than hurt it? 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Shelly Banjo in New York at

To contact the editor responsible for this story:
Mark Gongloff at