Under Armour plunges as revenue guidance misses expectations
Fox Business Briefs: Under Armour says it will cut about 474 jobs as part of a restructuring plan; Nike has reportedly sold 61 percent more merchandise since the controversial ad campaign featuring Colin Kaepernick.
Under Armour shares plunged more than 10 percent in trading Wednesday as the embattled retailer provided lower-than-expected revenue guidance at its investor day, especially in the key North American region.
The company said it expects revenue to grow by about 3 to 4 percent in 2019, falling short of Wall Street’s forecast of 5 percent growth, according to Refinitiv data. Growth is expected to stagnate in North America, where Under Armour has struggled to boost sales amid tough competition from rivals Nike and Adidas.
"As we execute against our long-term strategy, we remain unwavering in our commitment to protecting and growing the Under Armour brand," Under Armour CEO Kevin Plank said in statement. "Led by a strong management team, an accelerated innovation agenda and comprehensive discipline around our commitment to increasing total shareholder return, we look forward to delivering the next chapter in our growth story."
North America should return to low single-digit revenue growth from 2020 to 2023, Under Armour added. The company also said it would cut the amount of products it sources from China to 7 percent from 18 percent by 2023 – a decision that comes amid escalating trade tensions between the U.S. and China.
Facing a lengthy sales slump, Under Armour restructured its business, cutting hundreds of jobs while refocusing on production innovation and inventory management. Shares surged last October after the company posted strong quarterly results.