Under Armour Inc. is still struggling in North America and Wall Street isn’t happy.
The athleticwear brand said revenue for the third quarter fell by 5 percent year-over-year to $1.4 billion. This includes a 13 percent drop in wholesale sales and a 15 percent increase in direct-to-consumer sales.
Profits took a hit as well during the quarter, with net income totaling $54.2 million, compared with $128.2 million a year ago. Profits were partially impacted by $89 million in costs related to Under Armour’s restructuring plan, launched in August.
Shares of the athleticwear brand fell 23.7 percent to $12.52, an all-time low.
Chief executive officer and chairman Kevin Plank pointed to Under Armour’s international business as a strong point of the brand, but admitted that “operational challenges and lower demand in North America resulted in third-quarter revenue that was below our expectations.”
“Against this difficult backdrop, our management team is working aggressively to evolve our strategy and level of execution to proactively address these challenges,” Plank added. “We understand that success in our next chapter requires managing with focused financial discipline and driving excellence into every area of our business while we amplify innovation, deliver fresh product and connect even more deeply with our consumers.”
Plank has been working to reimagine the business, shifting from being a product company to a consumer-focused brand with distinct collections across men’s, women’s and kids.
The ceo said it’s “prudent” for Under Armour to lower its guidance for the year. Net revenue is now expected to only be up at a “low single-digit percentage rate,” and operating income is projected to top out at $10 million.
Under Armour revised its outlook earlier this year as well, saying revenues would grow 9 percent to 11 percent, down from the 11 percent to 12 percent initially projected.
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