Under Armour Inc. cut its revenue outlook for the year and is taking a beating for it on Wall Street.
Shares of the firm fell 8.8 percent to $16.52 in early trading today after the company said revenues would grow 9 to 11 percent this year, down from the 11 to 12 percent previously projected. Under Armour pinned the downward guidance on “moderation in the company’s North American business.”
Kevin Plank, chairman and chief executive officer, also laid out a restructuring plan, which will lead to $110 million to $130 million in pretax restructuring charges this year. Of that total, $15 million will go to employee severance and $30 million to contract termination.
“As we stand up our category management structure within a consumer-led approach, we intend to meaningfully increase our go-to-market speed and amplify our digital capabilities,” said Plank. “We’ve identified a number of areas to enhance our operational capabilities, drive process improvement and gain greater efficiencies. We remain steadfast in driving and building our brand while shifting our operational focus to become more return on investment and cost of capital centric — institutionalizing discipline to deliver more consistent, long-term shareholder value.”
In the second quarter, Under Armour grew on the top line, although the bottom line sagged again into the red.
The company’s second-quarter net losses narrowed to $12.3 million, or 3 cents a share, from $52.7 million, or 12 cents, a year earlier. Sales for the quarter ended June 30 rose 8.7 percent to $1.09 billion.
Plank, always the hard-charging coach, noted: “Our second-quarter performance validates the strength of our multiple growth levers to deliver solid results in today’s dynamic global environment. More than doubling our business over the last three years has required significant investments and resources to build our brand. We are utilizing 2017 to ensure that operations across our diverse portfolio of sport categories, distribution channels and geographies are optimized as we are building a stronger, faster and smarter company.”
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