NEW YORK (TheStreet) -- Shares of Under Armour (UA) - Get Report were plummeting 15.30% to $32.10 in pre-market trading on Tuesday after reporting a drop in gross margin and issuing downbeat guidance for 2017 and 2018.
Before the market open, the sportswear retailer said that gross margin declined to 47.5% in the third quarter from 48.8% in the year-ago quarter.
Additionally, Under Armour noted on the conference call that it expects revenue to increase in the low-20% range in 2017 and 2018. This would represent the slowest rate of growth since 2009, when the most recent recession ended, according to Bloomberg.
Apparel sales in North America are increasing more slowly than expected as well, Under Armour said.
For the 2016 third quarter, Under Armour reported earnings of 29 cents per share on revenue of $1.47 billion. Analysts surveyed by Thomson Reuters were looking for earnings of 25 cents per share on revenue of $1.46 billion.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C+.
Under Armour's strengths such as its robust revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures are countered by weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and premium valuation.
You can view the full analysis from the report here: UA
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.