Under Armour reported third-quarter earnings on Tuesday that topped analysts expectations, but revenue that fell short on account of weaker demand in North America.
The retailer also trimmed back its profit and revenue expectations for the full year.
Shares were falling around 15 percent on the news.
Here’s how the company did compared with what Wall Street expected:
- Earnings per share: 22 cents, adjusted, vs. 19 cents expected by analysts surveyed by Thomson Reuters.
- Revenue: $1.4 billion vs. $1.5 billion expected in the Thomson Reuters survey.
“While our international business continues to deliver against our ambition of building a global brand, operational challenges and lower demand in North America resulted in third quarter revenue that was below our expectations,” Under Armour Chief Executive Kevin Plank said in a statement.
“Based on these issues in our largest market, we believe it is prudent to reduce our sales and earnings outlook for the remainder of 2017,” Plank added.
Under Armour shares reached a record low in August, after the company announced it was cutting about 2 percent of its global workforce.
As sporting goods retailers struggle to hold their footing in the U.S. marketplace, Under Armour is reportedly exploring the exit of its tennis and other outdoor segments. Getting out of smaller categories, like fishing, could help the retailer focus on its core performance businesses, like basketball and golf.
Just last week, retail rival Nike laid out its updated strategy to pull product out of certain “mediocre” retailers and to focus more on women’s athletic apparel and footwear.
Looking to the future, some analysts are saying NBA star Stephen Curry’s new basketball shoe will spark a turnaround for Maryland-based Under Armour.
“Tighter allocations, fewer colorways and easy comps set the Curry 4 up to be the #1 bball sneaker this year, which would be a huge catalyst for UAA shares,” Jefferies analyst Randal Konik wrote in a note to clients Monday.
Under Armour also just launched its first subscription service, called ArmourBox. The company is trying to offer customers more customizable options.
As of Monday’s market close, Under Armour shares have fallen more than 40 percent in 2017.
Source: FactSet
This is a developing story. Please check back for updates.
