Under Armour clothing is seen for sale in a store in Manhattan, New York City, U.S., February 7, 2022. REUTERS/Andrew Kelly/File Photo
May 6 (Reuters) - Under Armour Inc (UAA.N) forecast full-year profit below estimates on Friday, as the sportswear maker grapples with higher transportation costs and a hit to its business from renewed COVID-19 curbs in China.
Shares of Under Armour tumbled over 23% and were on pace to record their worst day since October 2017, after the company also reported a surprise loss and bleak sales in the first three months of the year.
While economies around the world are reopening, a spike in COVID-19 infections in countries such as China has led governments to reinstate strict social restrictions once again, hurting manufacturing operations and retail sales.
Baltimore-based Under Armour said the curbs led to a 14% fall in revenue from the Asia-Pacific region in the quarter ended March 31. It generated about 15% of its revenue from the region last year.
Earlier on Friday, larger German rival Adidas (ADSGn.DE) reported a sales slump and also trimmed its 2022 targets. read more
Shipping delays and labor shortages have also pressured Under Armour's ability to get its hoodies and shoes to stores, forcing it to cancel orders.
"Supply chain pressures seem more a function of transportation pressure and elevated freight costs, rather than an issue of availability... Supply exists, getting it has been difficult," said BMO Capital Markets analyst Simeon Siegel.
Under Armour projected an adjusted per-share profit between 63 cents and 68 cents for fiscal year 2023, below Refinitiv estimates of 83 cents.
It sees 5% to 7% growth in sales, while analysts expect a 5.4% increase.
The company posted a loss of 1 cent per share in the reported quarter, compared with estimates for a 6-cent profit, while net revenue rose 3% to $1.30 billion, but missed analysts' average estimate.
Our Standards: The Thomson Reuters Trust Principles.
U.S. Trade Representative Katherine Tai on Wednesday said that she views tariffs on Chinese goods as "a significant piece of leverage" in the U.S.-China trade relationship and removing them would likely have a limited effect on controlling short-term inflation.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.