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Under Armour Stock Drops as Q2 Sales Fall 7%

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Under Armour Stock Drops as Q2 Sales Fall 7%

CEO Kevin Plank said the company is doing the hard work of improving efficiency and sharpening the product offering.

Kevin Plank is still in deep reset mode at Under Armour Inc. — but, as usual, Wall Street is finding it hard to be patient.

Plank, the driving force behind the company, said it was hitting its marks or better. Still, second-quarter sales were impacted by declines as the brand gets back into shape for the long run.

And investors sent shares of the company down 11 percent to $4.78 in premarket trading Friday.

“We delivered against our revenue expectation and exceeded our operating income outlook,” Plank said in a statement. “As we progress in this transformation, we are driving greater efficiency across our business, sharpening our product offering and amplifying global marketing to strengthen our brand and improve financial performance.”

Revenues for the quarter ended Sept. 30 fell 7 percent to $1.2 billion, with the declines felt evenly between North America and the international division. Analysts had expected the top line to perform worse, with an 8.3 percent decline, according to Yahoo.

By category, apparel revenues fell 6 percent to $880 million, while footwear declined 11 percent to $234 million and accessories were off 7 percent to $105 million.

Net losses for the quarter narrowed to $425,000 from $18.8 million a year earlier. On an adjusted basis, Under Armour hit break even.

The company has logged $280 million in restructuring costs so far and expects the total to approach $305 million when the efforts wrap up at the end of the year.


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