Under Armour said Friday that inventory fell 3 per cent in the transitional quarter ended March 31, and gross margin shrank to 46.5 per cent on higher freight costs. '
Shares of the Baltimore-based company plunged 24 per cent in New York, their biggest drop since January 2017. The stock has now lost almost half of its value this year.
Under Armour’s global revenue rose 3 per cent to US$1.3 billion in the quarter, dragged down by weak performance in Asia, where COVID shutdowns in China led to a 14 per cent drop in sales in the quarter. Revenue was up 4 per cent in North America, the company’s largest market.
Inflation in freight and product costs is taking a toll on operations. Gross margin this year is expected to be down 1.5 to 2 percentage points from the prior period’s adjusted gross margin of 49.6 per cent.
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