Under Armour slashed 2017 forecasts and reported its first quarterly fall in revenue since going public as it struggles against competition from Nike and Adidas. Fred Katayama reports.
Under Armour slashed its 2017 earnings forecasts. It also reported its first quarterly fall in revenue since going public in 2005. The stock - already one of the worst performing on the S&P 500 this year - plunged even further. And it took other shares along for the ride. Retail chains that sell Under Armour goods - such as Dick's Sporting - fell. Rival Nike was down too. Under Armour struggled with weaker demand for its products in its biggest market, North America. Analysts blamed the waning demand for athleisure fashion, an intensifying price war with Nike and Adidas, and lack of innovation. Chase Bank chief economist Anthony Chan says Under Armour and its peers have a lot catching up to do. (SOUNDBITE) ANTHONY CHAN, CHIEF ECONOMIST, CHASE BANK (ENGLISH) SAYING: "All companies, whether it's Under Armour or whether it's Macy's or whether it's Nike, or almost any company, will have to adjust their strategy moving forward to the fact that the consumer is purchasing things a little bit differently. They have different interests. To some extent, you could even argue that, even when we buy products as consumers, we want to experience something that's unique and something that's exciting, even the products that we purchase." For the drop in sales, Under Armour also blamed "operational challenges" related to the upgrading of its IT systems. The company will give its 2018 outlook during a year-end earnings conference call in mid-February.