By Justin Pei
Rochester, NY–Shares of Under Armour fell on Tuesday by 18% during premarket trading after the company announced that its 2020 revenue would be hurt by the coronavirus outbreak in China, one of the largest growing markets for the brand.
The company stated that it expects to take a hit in sales by up to $60 million during the first 2020 fiscal quarter as a result of the virus. Additionally, the company is preparing for the possibility of supply-chain disruptions as hundreds of retailers close in the Asian-Pacific region.
As a result, Under Armour reported fourth-quarter earnings fell short of analyst’s estimates. Total revenue for the company in the fourth-quarter was $1.44 billion. The company has a market cap of about $7.6 billion compared to Nike’s $156 billion.
Patrik Frisk, the new CEO of Under Armour who succeeded company founder Kevin Plank in January, told analysts that “We think it’s reasonable to expect industry-wide delays in terms of delivery around the world — including potentially missed shipments and service windows, and the need for increased air freight and additional measures at ports that could create unforeseen congestion.”
The company is currently undergoing a restructuring that includes $325 million to $425 million in pre-tax charges for 2020 as the company forgoes not opening its New York City flagship store.
