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Shares of Under Armour weaken by more than 23%

Under Armour disappointed investors in its results for the first quarter of the year. The company is experiencing problems mainly in Asia.

The company reported a net loss of $60 million for the first quarter, which did not please investors. The loss was due to, among other things, a 14% drop in sales in the Asia-Pacific region. This decline was primarily due to the situation regarding the covid-19 pandemic in China, where large lockdowns are still in place. In addition, the company experienced 4% growth in North America, 18% growth in Europe, and a 6% decline in Latin America.

Excluding one-time items, it lost 1 cent per share. Analysts were expecting adjusted earnings per share of 6 cents. Adjusted diluted earnings per share are expected to be in the range of $0.63 to $0.68, also lower than analysts’ expectations.

Under Armour Inc. logo displayed on smartphone

It’s not just about the numbers

Like almost all industries, this apparel one is experiencing a global supply chain problem, inflationary pressures, and global price increases on almost everything. All of this puts pressure on retailers’ margins, but it also increases the cost of transport and production. This quarter, the company reported a 16% increase in Selling, General & Administrative costs.

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Chief Financial Officer David Bergman said profit margins were pressured by higher than expected freight costs, particularly ocean freight costs. He said that Under Armour was also making more use of air freight from overseas.

Bruno is an Investment enthusiast with several years of experience in the industry. He enjoys following the latest news and technology trends...


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