On August 1, Under Armour (NYSE:$UAA) reported a narrower-than-expected Q2 loss. However, shares of the company dropped after its sales forecast was cut for 2017. We now know the sports apparel company plans to cut roughly 2% of its global workforce as it gives its business a face lift in the wake of slumping sales. To put that into perspective, 2% of Under Armour’s global workforce is equivalent to about 280 jobs.
Let’s take a look at what Under Armour reported versus what Wall Street was expecting:
- EPS: an adjusted loss of 3 cents, versus an expected loss of 6 cents, according to Thomson Reuters.
- Revenue: Brought in $1.088 billion versus a forecast for $1.077 billion.
In 2016, Under Armour announced a loss of 12 cents per share on revenue of $1.001 billion.
After the news, in premarket trading on Tuesday, the company’s stock dropped more than 8%. Most recently, Under Armour shares were down roughly 6%.
The Baltimore, Maryland-based company now expects adjusted earnings for 2017 to fall within the range of 37 cents and 40 cents per share. This excludes any impacts from restructuring. According to Thomson Reuters estimates, analysts had expected Under Armour to earn 42 cents a share for the full year. Speaking of restructuring, Under Armour now forecasts that the company will incur pretax charges of $110 million to $130 million in fiscal 2017. However, most of these charges will appear in Q3.
Additionally, Under Armour announced that revenue is expected to increase 9-11%, which is lower than its previous forecast of 11 to 12% growth.
During the earnings call, CEO Kevin Plank identified five areas the company will need to focus on in the future. The five include the following: men’s training, running, women’s apparel, basketball, and lifestyle.
Featured Image: twitter
