Under Armour slashes revenue and earnings forecast
Sports brand has been battered over the past year amid slowing growth
Sales in the third quarter trailed analysts’ estimates, sending shares down as much as 18 per cent in early trading.
Under Armour has failed to give investors a much-needed sign that it’s emerging from a string of setbacks.
A continuing slump in its North American business offset growth elsewhere, leading the company to slash its full-year revenue and earnings forecasts. Sales in the third quarter also trailed analysts’ estimates, sending the shares down as much as 18 per cent in early trading Tuesday.
The sports brand has been battered over the past year amid slowing growth, its first net losses and concerns about whether its nascent footwear business has faltered.
Under Armour was founded on football workout gear and then fuelled explosive growth by expanding into new categories. The company looked like it had a formidable footwear business that surpassed $1 billion in sales in 2016, but it has struggled this year.
The Baltimore-based company cut its sales outlook for the year to a gain of a low-single-digit percentage. This comes after a previous reduction in August to growth of 9 per cent to 11 per cent.
It also lowered its forecast for profit excluding some items to 18 to 20 US cents a share, down from a previous range of 37 to 40 cents.
Under Armour is not alone. Nike, the world’s largest sports brand, has also experienced lacklustre growth in the US.
What Under Armour and Nike don’t talk about is that Adidas continues take market share from both of them in North America.Revenue was $1.41 billion in the third quarter, the company said in a statement Tuesday. That missed the average $1.48 billion estimate. Profit excluding some items was 22 cents a share, topping projections for 19 cents. – (Bloomberg)