The sports apparel company disappointed investors as it fell short of both revenues and earnings per share Wall Street's targets.
Under Armour (NYSE: Under Armour [UA]) shares tumbled 28% in the pre-market trading today, shortly after it shared the fourth-quarter results that turned out to be much worse than expected. The company's earnings amounted to 23 cents per share, slightly below the analyst expectations of 25 cents per share. At the same time, revenues came in at $1.31 billion, as compared to the estimates of $1.41 billion.
"We are incredibly proud that in 2016, we once again posted record revenue and earnings, however, numerous challenges and disruptions in North American retail tempered our fourth quarter results," Kevin Plank, Under Armour Chairman and CEO, said in a statement.
Reuters adds that, despite rising 12% from a year before, Under Armour's net revenue still showed the slowest sales growth in the last eight years, what is quite unusual for the company that managed to double its sales results every few years.
The Street's analysts commented that by "numerous challenges and disruptions in North American retail" Plank likely meant bankruptcies and store closures of the largest department store chains like Kohl's (NYSE: Kohl's Corporation [KSS]) and Macy's (NYSE: Macy's [M]) as well as the struggles of The Sports Authority. Earlier this month, Macy's announced that it planned to get rid of over 10,000 jobs and close down around 100 retail locations across the country.
"We just have to be more thoughtful about how to capture the consumers and their dollars including replacing with our own direct-to-consumer controlled retail as well as expanded distribution by doing things like Kohl’s, which will carry the Under Armour product beginning in 2017," Plank said in October's statement.
On top of that, the sportswear company announced that its Chief Financial Officer Chip Molloy would leave the company already by the end of this week.
Under Armour traded below $20.50 in today's early trading in New York.