Shares of Under Armour Inc. fell over concerns of future growth for the company, even though the company beat Wall Street’s third-quarter’s estimates.
“While we continue to significantly outpace the apparel industry, the growth rate going forward will be less than expected from our Investor Day in 2015,” said Chip Molloy, chief financial officer, during the company’s conference call with Wall Street analysts.
Molloy said the company back then noted a goal of achieving $7.5 billion in revenues with $800 million of operating income in 2018. “We are on track to achieve our 2018 revenues of $7.5 billion,” he said.
Investors sent shares of Under Armour down 13.2 percent in trading Tuesday, with more than 58 million shares changing hands.
For the three months ended Sept. 30, net income was up 27.6 percent to $128.2 million, or 29 cents a diluted share, from $100.5 million, or 23 cents, a year ago. Net revenues rose 22.2 percent to $1.47 billion from $1.20 billion. Wall Street’s consensus estimate was 25 cents on revenues of $1.45 billion.
By category, apparel sales rose 18 percent to $1.02 billion, footwear jumped 42.1 percent to $278.9 million and accessories were up 17.6 percent to $121.8 million. The balance of revenues was from licensing and its connected fitness platform.
Kevin Plank, chairman and chief executive officer, said on the call, “We are a growth company.” He noted that the quarter marked the firm’s 26th consecutive quarter of 20-plus percent revenue growth. He said footwear and international continues to be key drivers for revenue growth. On the international front, Plank said the Greater China market remains the biggest growth story, and that the company also rolled out e-commerce platforms and expanded into new markets, such as Mexico, Australia, New Zealand and Chile. In total, its global e-commerce sites number 230, Plank said.
The company’s North American revenues rose 15.6 percent to $1.23 billion, while its international revenues jumped 73.7 percent to $226.2 million.
The ceo reiterated the company’s revenue target for 2018, adding, “I am confident we will remain the market leader in growth by delivery innovation at every touch point.”
The company said for 2016, it continues to expect net revenues of $4.93 billion, or growth of 24 percent over 2015.