CBS/AP Shares in ailing Under Armour (UA) plunged after the sportswear maker forecast weaker domestic in sales and profits through the end of the year.
Under Armour CEO Kevin Plank said in a statement that "operational challenges and lower demand" for its products in North America hurt the company's third-quarter results. He that international sales are growing more quickly.
Under Armour's stock price fell nearly 16 percent to $12.40 in early afternoon trading. The company's shares are down more than 50 percent this year. The Baltimore company also lowered its annual per-share earnings forecast for the second time in three months, to between 18 and 20 cents per share. That's about half what it told investors to expect in August.
Shares of rivals Nike (NKE) are up nearly 8 percent in 2017, while Adidas is on an even bigger roll.
In a conference call with stock analysts to discuss the Under Armour's latest financial results, Plank said a host of factors hurt its third-quarter performance, including shifting consumer tastes in athletic fashion, sports apparel merchants shutting their doors and a glut of inventory in stores.
Quarterly profit was $54.2 million, or 12 cents per share. Earnings, adjusted for restructuring costs, came to 22 cents per share, which was actually 3 cents better than Wall Street had expected, according to a survey by Zacks Investment Research. Under Armour reported earnings of $128.2 million, or 29 cents per share, for the third quarter last year.
Yet revenue slumped 5 percent to $1.41 billion, short of Wall Street's expectations of $1.49 billion. Sales in North America slid an even sharper 12 percent amid weaker demand for apparel, basketball shoes and youth products.
"As we look to close out 2017, we do not expect these conditions to improve," he said, adding that he expects the retail environment in North America to remain difficult well into 2018.
Under Armour in August announced a restructuring plan aimed at cutting costs. It expects to take a pre-tax charge of $140 million to $150 million to account for the initiative.
Neil Saunders, managing director of GlobalData Retail, asked "how did the one-time powerhouse of sports retail lose so much traction so quickly?"
There has been pressure on the entire sportswear sector, with US consumers increasingly elusive, but Saunders believes Under Armour is in an especially tough place.
"This is now about more than external factors; it demonstrates issues with the brand and its proposition," Saunders wrote. "Especially so since other brands and retailers, including Lululemon, have not posted such calamitous figures."
Under Armour is hoping for a lift when it introduces its latest Stephen Curry sneaker, which debuts in stores on Friday and which will retail for $130 in a black and white color scheme. Curry, a two-time NBA MVP, is considered one of the most marketable figures in professional sports.