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Under Armour, Inc. ( UA) Chairman and CEO Kevin Plank, with his company coming out of a bruising quarter, told investors, "We enjoyed hypergrowth for years. We still remain a growth company," during an earnings call on Tuesday, Aug. 1.
That's certainly a surprising spin about a company that reported a lackluster second quarter, with revenue up 9% to $1.1 billion and a net loss of $12 million. Gross profit margins fell 190 basis points from the prior year, and guidance
Net revenues are expected to grow 9% to 11% versus the previous expectation of 11% to 12%. Operating profits are seen in a range of $280 million to $300 million, excluding one-time items. Under Armour previously expected $320 million.
Shares plunged more than 7% in afternoon trading, for the company that is struggling to find its footing as it just revealed a new corporate overhaul on Tuesday.
Bright spots for the company are in Asia, including China and Korea; the company is also moving into Latin America, its newest international market, which Plank said will "take some time" to develop.
Among the areas the company pour more investment into are digital and its new SAP systems, but also into its women's and lifestyle lines. Plank touted the athletes sponsored by the company, such as star basketball player Stephen Curry, golfer Jordan Spieth, who recently won the British Open, and principal American Ballet Theatre ballerina Misty Copeland as plums for the company, but added creating innovative products and getting them to the customer faster, which is what most company CEOs say, are key to the strategy.
"We've identified a number of areas to enhance our operational capabilities, drive process improvement and gain greater efficiencies. We remain steadfast in driving and building our brand while shifting our operational focus to become more return-on-investment and cost of capital centric, institutionalizing discipline to deliver more consistent, long-term shareholder value," Plank said in a press release.
With that restructuring comes hefty costs, including total estimated pretax restructuring and related charges of some $110 million to $130 million in fiscal 2017.
Meanwhile, Stephen Curry is making bank:
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