Under Armour announced that its quarterly sales will decline more than predicted and the company will face $100 million in additional annual costs from new U.S. tariffs which caused its stock price to drop 20%.
The sportswear manufacturer Under Armour faces increased import duties on Vietnamese and Indonesian products because these countries supply 45% of its merchandise. CEO Kevin Plank stated that the company could implement price increases in areas with pricing power yet he emphasized that market demand continues to be weak.
The company expects its gross margin to decrease by 360 basis points during this quarter because of currency benefits and strategic price increases. The company now predicts a 6% to 7% revenue decrease which differs from analyst expectations of a 3% decline.
The company reported $1.13 billion in first-quarter sales which matched market predictions but its adjusted profit results fell short of expectations.
