By Gayathree Ganesan
(Reuters) - Under Armour Inc (UAA.N) slashed 2017 forecasts and reported its first quarterly fall in revenue since going public on Tuesday, as the sportswear firm struggled to make inroads against global rivals Nike (NKE.N) and Adidas (ADSGn.DE).
Shares of the maker of Stephen Curry basketball sneakers, already among the worst performing stocks on the S&P 500 (.SPX) this year, sank 17 percent in morning trade in New York, hitting a four-and-a-half year low.
The results also worsened sentiment in other sportswear firms, pulling Nike shares 1.5 percent lower and weakening retail chains including Dick's Sporting (DKS.N), Finish Line (FINL.O) and Hibbet (HIBB.O), which all sell Under Armour gear.
Chief Executive Kevin Plank on a call with analysts blamed sporting good retailer bankruptcies and store closures, declining traffic to brick-and-mortar chains and shifting fashion preferences in North America for its underperformance.
"We are incredibly disappointed with our 2017 performance," Plank said on a post-earnings call.
The pressure that drove the Baltimore-based firm to announce a restructuring program in August - for which it took an $85 million charge in the quarter - was written large across the results, with North American wholesale revenue down 12 percent.
One big headache is declining demand and a waning trend for athleisure fashion, where customers wear exercise clothing in day-to-day life, in which Under Armour has been trying to specialize.
A growing retail price war and Adidas's resurgence in North America, where it has won back customers by bringing back and remarketing its retro line of shoes, has exacerbated the company's problems.
"This is now about more than external factors," Neil Saunders, managing director of research house GlobalData Retail, wrote in a note on the company's results.
"It demonstrates issues with the (Under Armour) brand and its proposition. Especially so since other brands and retailers... have not posted such calamitous figures."
Its restructuring plan sought to cut white-collar jobs, close some stores and reduce its focus on lower revenue sports including tennis and fishing, while focusing more on women's sportswear apparel.
FURTHER WEAKNESS
On the call with analysts, Plank said he expected weakness in its North American wholesale business to continue "well into the next year."
The company cut its forecast for a percentage rise in full-year revenue to the low single-digits from 9-11 percent earlier. It also cut its full-year adjusted earnings forecast to 18 to 20 cents per share, compared to a previous 37 to 40 cents.