Due to increased discounts and markdowns of older inventory, Under Armour announced lower-than-expected profit margins even though it exceeded earnings and revenue estimates in the fourth quarter.
The company reported a net income of $170.5M, or 38 cents per share, compared to a net loss of $59.6M the previous year. Following the news, Under Armour's stock dropped more than 6% on Tuesday.
Under Armour beat analysts' expectations for the fiscal fourth quarter with $1.4B in sales and $0.18 in adjusted earnings per share.
- North America accounted for the company's lower sales in the most recent quarter, with net sales only expanding by 2.5% as opposed to better growth in Europe and Asia-Pacific.
- The athletic apparel and footwear retailer expects lower margins due to higher promotions and a $0.03 - $0.05 per share loss in the next quarter.