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Under Armour forecasts sharper revenue decline as North America demand drops
The company now expects full-year revenue to fall mid-single digits, after previously targeting only a slight decline.
Under Armour warned that its turnaround is running into tougher demand conditions, forecasting a sharper full-year revenue decline. On Aug. 7, the athletic apparel maker projected revenue to drop by a mid-single-digit percentage, replacing an earlier outlook for only a slight decline, sending shares down as much as 9% early in trading, according to Yahoo Finance.
The forecast pressure is most evident in North America, the company’s largest market. In the fiscal quarter ended June 30, Under Armour reported North America revenue fell 9% to $609.8 million.
On the post-earnings call, CFO Reza Taleghani said the company expects a more difficult consumer environment to persist through the second quarter, particularly in North America and parts of Asia Pacific. Yahoo Finance also noted that inflation and softer discretionary spending have made shoppers more cautious about items like apparel, footwear, and accessories.
Yahoo Finance pointed to competitive headwinds as well, with buyers showing more interest in newer, innovation-focused brands such as On and Hoka. CEO Kevin Plank has pursued a turnaround strategy of doing less but better, including reducing its product assortment by about 25% and focusing on higher-priced categories including training, running, and team sports.