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Under Armour plunges after warning that future sales growth may stink
(Under Armour)
Under Armour shares sank by as much as 14% in early trading on Tuesday after the company beat third-quarter profit expectations but warned about future sales growth.
The retailer said its North American apparel growth rate would be slower than it previously thought.
It said it expected revenue to rise in the low 20% range during 2017 and 2018, which would be its slowest pace since 2009, according to Bloomberg.
The company reported better-than-expected quarterly sales, as demand for its apparel, shoes, and accessories grew.
Under Armour has been offering more "athleisure" clothing — a term for popular daily-wear clothing inspired by exercise outfits — in a push to expand its apparel business.
Celebrities including model Gisele Bündchen and ballerina Misty Copeland endorse its athleisure lines.
Under Armour's apparel revenue rose by 18% to $1.02 billion as demand for its training, golf, and team sports clothing rose.
Net income rose to $128.23 million in the third quarter that ended September 30 from $100.48 million a year earlier.
On a per-share basis, earnings rose to $0.29 per Class C share from $0.23. The company earned $0.29 per Class A and Class B share, from $0.23, a year earlier.
Revenue rose to $1.47 billion, from $1.20 billion.
Analysts on average had expected a profit of $0.25 a share and revenue of $1.46 billion, according to Thomson Reuters I/B/E/S.
Up to Monday's close, the stock had fallen by about 20% in the past 12 months.
(Markets Insider)
(Reuters reporting by Jessica Kuruthukulangara and Gayathree Ganesan in Bengaluru; Editing by Shounak Dasgupta)
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