- Under Armour reported fiscal fourth-quarter and full-year 2019 results Tuesday that missed analyst expectations.
- Shares fell as much as 16% in early trading Tuesday.
- The company lowered its first quarter 2020 sales outlook, and said that it would see a hit of $US50 million to $US60 million due to the coronavirus outbreak in China.
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Shares of Under Armour fell as much as 16% in early trading Tuesday after it reported fiscal fourth-quarter and full-year 2019 sales that fell short of Wall Street estimates.
Here’s what the retailer reported, versus what analysts surveyed by Bloomberg expected:
- Adjusted earnings per share: 10 cents reported versus 10 cents (expected)
- Revenue: $US1.4 billion reported versus $US1.47 billion (expected)
The company also issued a less-than-rosy outlook for its future. Under Armour now expects its sales to be down “at a low-single digit per cent” in fiscal 2020.
“Ongoing demand challenges and the need to drive greater efficiencies in our business requires us to further prioritise our investments to put our company in the best position possible to achieve sustainable, profitable growth over the long-term,” CEO Patrik Frisk said in a press release.
Under Armour also expects to take a hit from the coronavirus outbreak in China of approximately $US50 million to $US60 million in sales related to the first quarter of 2020. The company also said that “given the significant level of uncertainty with this dynamic and evolving situation, full year results could be further materially impacted.”
The coronavirus outbreak that originated in Wuhan, China, has killed more than 1,000 and infected more than 42,000 worldwide. It’s forced the closures of many businesses from retailers to restaurants and manufacturers as the government races to control the spread of the epidemic.
Under Armour also announced that it is currently assessing a potential 2020 restructuring plan, to “rebalance its cost base to further improve profitability and cash flow generation.” The company is considering $US325 million to $US425 million in estimated pre-tax charges for 2020, which include approximately $US225 million to $US250 million if the company decides not to open a flagship store in New York City.
The company also recently underwent a shakeup in leadership. On January 1, Frisk took over the CEO position from founder Kevin Plank, who remains the executive chairman and brand chief of Under Armour.
Under Armour has fallen about 5% year-to-date through Monday’s close.
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