(Reuters) -Under Armour forecast second-quarter revenue below estimates on Friday as still-high inflation and tariff uncertainty weigh on demand in North America, sending the sportswear maker’s shares down 13% in premarket trading.
The retailer’s sales have declined over the last two years and attempts to reset the business are running into trouble, as the Trump administration’s fluctuating tariff policies fan uncertainty and pressure consumer spending.
Maryland-based Under Armour in May announced plans to raise prices, further risking demand for its apparel as customers looked for cheaper options.
On Friday, the company said its revenue forecast includes considerations for ongoing uncertainty around trade policies and the broader macroeconomic environment, as well as potential impacts of tariffs on demand and cost.
The company was sourcing about 30% of its overall merchandise volume from Vietnam and 15% from Indonesia as of May. It faces a direct risk from the still uncertain levies, including 20% tariffs on goods from Vietnam, and 19% on Indonesian goods.
Under Armour expects current-quarter gross margin to decline by 340 to 360 basis points due to potential tariff-related supply chain snags, but said favorable foreign exchange and pricing benefits would partially offset the decline.
The company forecast quarterly revenue to decline between 6% and 7%, compared with analysts’ average estimate of a 2.9% drop, according to data compiled by LSEG.
For the first quarter ended June 30, revenue fell 4% to $1.13 billion, in line with estimates.
It posted quarterly adjusted profit per share of 2 cents, missing estimates of 3 cents.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Devika Syamnath)
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