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Under Armour: Let’s Just Pretend This Year Never Happened

Under Armour shares are tumbling following the company’s disappointing earnings report.

Things just keep getting worse for Under Armour, which Tuesday morning reported weak third-quarter results and forecast a gloomy outlook for the rest of the year.

Though the company is showing growth in its direct-to-consumer and international segments, most other areas of the business continue to struggle. North America revenue fell 12%, to $1.1 billion and apparel revenue declined 8%, to $939 million.

Management also cut its full-year earnings forecast in half, to a range of 18 cents to 20 cents. Given that there’s just one unreported quarter left in the year, the new outlook implies that the company thinks earnings for the current quarter will be between zero and two cents. Analysts were expecting 21 cents.

On a conference call following results, CEO Kevin Plank cited “geographic variance, retail disruption, competitive undercurrents and changing consumer preferences” but said that the company will be working to improve its product assortment and get items to consumers more quickly.

Though Under Armour didn’t give a forecast for 2018, the company seems to want to write this year off and move forward. Management is optimistic that the new Curry 4 shoe and the company’s forthcoming cushioning technology will reignite the footwear business, and Plank predicts that the international and direct-to-consumer segments will keep growing nicely.

Shares are down 15%.


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