Under Armour Cautiously Plans Future Amid Slumping Sales

The earnings numbers are in for Under Armour, and it’s not exactly what the sports apparel retailer was hoping for. This week, Under Armour shared news that its Q2 earnings results showed a very narrow miss of analysts’ expected outcome. While analysts were expecting to see a loss of six cents, Under Armour’s shares reported a loss of three cents. This results in the company seeing a revenue of $1.088 billion over the $1.077-billion projection.

As a result, the company is deciding to cut approximately two percent of its global workforce, about 280 positions. Following this restructuring plan, Under Armour is also reworking its sales forecast outlook for the remainder of 2017. Outside of its restructuring efforts, Under Armour is expecting its adjusted earnings for the year to be between 37 cents and 40 cents per share, while analysts are projecting 42 cents per share.

To help move the ball for its yearly revenue, Under Armour is focusing on five specific areas of interest which include men’s training, women’s, running, basketball and lifestyle sports apparel, in addition to its restructuring  efforts.

Under Armour CEO Kevin Plank shared his thoughts on the company’s performance with investors on the Tuesday earnings call. “After 6½ years of more than 20 percent top-line growth that ended in the fourth quarter of last year, we are clearly operating in a different environment, particularly in our largest market [of] North America.”

Two areas that did see some growth this past quarter for Under Armour were its sales to wholesale customers and direct-to-consumer sales, which saw three percent and 20 percent bumps respectively. As such, it should come as no surprise that the company is starting to ramp up on its third-party partnerships, which include a deal with Kohl’s department store this past spring to sell its products in 1,000 brick-and-mortar locations.