Under Armour expects another weak year as North America struggles, shares slump
It projects annual adjusted operating income to be in the range of US$140 million to US$160 million
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[MARYLAND] Under Armour forecast another annual revenue decline on Tuesday (May 12) and said it expects profit to be well below estimates, as the weakness in its key North American market weighs on CEO Kevin Plank’s turnaround efforts.
Shares of the sportswear maker, which has reported sales declines for three straight years, fell about 14 per cent in premarket trading.
Plank, also the founder of the company and who returned as CEO in 2024, has zeroed in on trimming about 25 per cent of its product lines and shifting to higher-priced items in categories such as training, running and team sports.
“We’re streamlining our operating model and increasing accountability in execution,” he said.
Under Armour expects annual adjusted operating income to be in the range of US$140 million to US$160 million.
This includes about US$70 million in benefits from potential tariff refunds, along with a roughly US$35 million hit from the conflict in the Middle East.
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The company also projected annual adjusted profit per share of between US$0.08 and US$0.12, compared with analysts’ average expectation of US$0.23.
The apparel retailer expects revenue for its fiscal year 2027 to fall slightly, compared with analysts’ average expectation of a 1.6 per cent rise to US$5.05 billion, going by data compiled by the London Stock Exchange Group.
Annual sales in North America are projected to decline by a low single-digit percentage, Under Armour said.
The downbeat report adds to concerns about the challenges the company faces to stabilise its core business in a market with shoppers growing more selective, and intensified competition from brands such as Nike, Lululemon, Adidas and Puma.
In the quarter ended Mar 31, Under Armour posted a wider-than-expected loss, while its quarterly revenue fell 1 per cent to US$1.17 billion from the year-ago period and was in line with estimates. REUTERS
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