Athletic apparel and footwear brand Under Armour (UA) is having a bad week. The Baltimore-based company’s streak of 26 consecutive quarters with 20 percent or high sales growth has come to an end.
On Tuesday, the brand reported that fourth quarter revenue increased 12 percent to $1.3 billion, missing the $1.41 billion expected from Wall Street. The company’s CFO, Chip Molloy, also announced he would be stepping down on Feb. 3 citing personal reasons. David Bergman, senior VP of corporate finance, will taken the role of acting CFO.
Fourth quarter revenue was led by a 5 percent increase in wholesale and 23 percent in direct to consumer. The company’s focus on footwear helped, with the sector increasing by 36 percent to $228 million due to growth in running and basketball shoes for the fourth quarter.
For the year, revenue increased 22 percent to $4.8 billion. The bump in revenue was boosted by a 19 percent increase in wholesale ($3.1 billion) and a 27 percent increase in direct-to-consumer ($1.5 billion.)
“The strength of our Brand, an unparalleled connection with our consumers and the continuation of investments in our fastest growing businesses — footwear, international and direct-to-consumer — give us great confidence in our ability to navigate the current retail environment, execute against our long-term growth strategy and create value to our shareholders,” said Kevin Plank, Under Armour chairman and CEO.
The company’s cautious guidance puts net revenue growth at only 11-12 percent for 2017, or $5.4 billion. UA’s growth margin is expected to decrease due to the current currency climate and footwear and international sales, which are lower margin, outpacing higher margin apparel and North American business.