Under Armour Inc. on Friday reported an unexpected loss of $59.6 million in the first three months of the year, prompting a steep drop in its share price.
On a per-share basis, the Baltimore company had a loss of 13 cents for the quarter ended March 31. Losses, adjusted for restructuring costs, came to 1 cent per share. The results fell short of Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of 4 cents per share.
Investors punished the company’s stock Friday, driving it down 25% to $9.93 a share at 1:30 p.m.
The footwear and sports apparel company said the poor results were a combination of several factors — chiefly, global supply chain snarls, COVID-19 uncertainty and inflationary pressure.
“As global supply challenges and emergent COVID-19 impacts in China eventually normalize, we are confident that the strength of the Under Armour brand coupled with our powerful growth strategy positions us well to deliver sustainable, profitable returns to shareholders over the long term,” said Under Armour President and CEO Patrik Frisk in a news release.
The sports apparel company posted revenue of $1.3 billion in the transition period, also missing Street forecasts. Ten analysts surveyed by Zacks expected $1.33 billion.
Under Armour expects full-year 2023 earnings in the range of 63 cents to 68 cents per share.
As announced in February 2021, Under Armour changed its fiscal year from Dec. 31 to March 31. Following a three-month transition period (Jan. 1 – March 31, 2022), the company’s fiscal year 2023 will run from April 1, 2022, through March 31, 2023. As a result, there will be no fiscal year 2022.