Under Armour, Inc. (NYSE: UA) plunged as much as 20 percent in the early trading on Tuesday after the company posted worse-than-expected fourth quarter sales and earnings, raising concerns that years’ of rapid growth finally come to an end.
The sports-apparel marker said revenue rose 12 percent to $1.31 billion in the quarter ended Dec.31, the slowest sales growth in eight years. Analysts polled by Thomson Reuters had projected revenue of $1.41 billion. Net income fell to $104.9 million, or 23 cents a share, in the fourth quarter, also missing analysts’ estimate of 25 cents a share.
Under Armour shares tumbled 20 percent to $20 in the early trading in New York. The stock had dropped 30 percent last year due to growth concerns. Under Amour found it difficult to maintain its rapid growth as increasing competition and slowing growth in North America. The company had doubled its revenue about every three year but now it just see 12 percent growth in sales this year.
"The current environment represents an inflection point to maximize our unique strengths by staying on offense -- investing smartly in innovation, deepening our brand connection with consumers and amplifying our focus on operational excellence -- positioning Under Armour as a stronger company."Kevin Plank, the company’s chief executive officer and founder, said.