Under Armour Shares Sink After Downbeat Outlook

By Tonya GarciaMarketsMarketWatch Pulse

Under Armour Inc. shares plunged 14.5% in Tuesday premarket trading after the company said its growth rate will be lower than expected. The company announced the goal of reaching $7.5 billion in revenue and $800 million at its 2015 Investor Day, said Chief Financial Officer Chip Molloy on the earnings call. However, the North American apparel business is slowing and "the growth rate going forward will be less than expected," he said. "We could choose to optimize for more near-term profits but we believe it is more prudent to invest to maintain superior growth rates while gaining both share and scale." Under Armour plans to invest in footwear, direct-to consumer and international, which are growing faster, and continue to pursue business in the sports lifestyle category, for example, through its new UAS line. Under Armour shares are down 9% for the year so far while the S&P 500 Index is up 5.3% for the same period.

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