Under Armour cuts revenue forecast; federal probe weighs on shares

[November 04, 2019]    (Reuters) - Under Armour Inc <UA.N> <UAA.N> on Monday cut its forecast for annual revenue for a second straight time, adding to its troubles after the sportswear maker disclosed a federal probe related to its accounting practices.

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The ticker symbol and company logo for Under Armour, Inc. is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., January 22, 2019. REUTERS/Brendan McDermid

Shares of the company were down 13%, a day after the Wall Street Journal reported that the company was being investigated for shifting sales from quarter to quarter to appear financially healthier.

The company, however, defended its accounting practices and disclosures, while adding that it has been cooperating with the investigators since 2017.

Under Armour's forecast cut comes at a time when it has been struggling to grow in the United States where it faces competition from Nike Inc <NKE.N>, Lululemon Athletica <LULU.O> and Adidas <ADSGn.DE>.

To keep up, the company last year announced a strategy where it would sell apparel and footwear directly to customers online or through its own retail stores.

The sportswear maker said it now expects revenue to grow about 2% in fiscal 2019 compared with the prior forecast of a 3% to 4% rise.

However, fewer sales in off-price channels helped the company forecast annual profit at the higher end of its prior range of about of 33 cents per share to 34 cents per share.

Net revenue fell about 1% to $1.43 billion in the third quarter ended Sept. 30.

Net income rose to $102.3 million, or 23 cents per share, from $75.27 million, or 17 cents per share, a year earlier.

Analysts were expecting the company to earn 18 cents per share and generate $1.41 billion in revenue, according to IBES data from Refinitiv.

(Reporting by Nivedita Balu in Bengaluru; Editing by Arun Koyyur)

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