On Tuesday, Under Armour (NYSE: UAA) cut their profit and revenue forecast for the full year due to weaker demand for their products across the U.S. and Canada, which is their largest market by sales. However, Chief Executive Kevin Plank still has a positive outlook for next year by continuing to strengthen Under Armour’s international direct to consumer business strategy since North American wholesale business still show signs of difficulties.
The retailer reported third quarter revenue that was short of analysts’ predictions as they booked an $85 million charge for restructuring efforts during this period. Shares dropped around 14% with earnings per share at 22 cents and revenue totaling to $1.4 billion, which was lower than Wall Street’s expectations of $1.5 billion. This year, Under Armour reported a quarterly net profit of $54.2 million compared with $128.2 million last year. U.S. sales fell 12% while international revenue increased by 35%.
Under Armour’s apparel sales fell 8% mostly driven by weaknesses in youth products and women’s training. Now, the retailer is cutting their sales forecasts and is expecting revenue to be in the low single digit percentage range. This year’s earnings per share is predicted to drop within a range of 18 cents to 20 cents compared to a previous projected earnings of 27 cents to 40 cents a share.
"While our international business continues to deliver against our ambition of building a global brand, operational challenges and lower demand in North America resulted in third quarter revenue that was below our expectations," said Under Armour Chairman and CEO Kevin Plank. "Based on these issues in our largest market, we believe it is prudent to reduce our sales and earnings outlook for the remainder of 2017."