Company - - Feb 01,2017
Under Armour Inc. said that its chief financial officer Chip Molloy would be leaving the company and also reported lower-than-expected quarterly sales.
The sports clothing and accessories company has been hurt by intense competition and slowing growth in North America. The stock price was $19.17, down about 23% from Monday’s close.
Under Armour stated that Mr. Molloy is leaving the company for personal reasons. Former CFO of PetSmart, Chip Molloy, joined Under Armour in last January. Molloy is the most recent in a series of executive exoduses, which included a chief digital officer, a chief merchandising officer and a senior vice president of the company last year.
According to Under Armour, net income fell to $104.9 million in the 4th quarter from $105.6 million a year earlier. On a per-share basis, incomes drop to 23 percent for Class A, Class B and Class C shares from 24 cents a year earlier.
Under Armour also dropped its forecast for sales growth this year to 11% to 12% from the low-20% range. While the supplier of sportswear and casual apparel reached a record $4.8bn in sales in 2016, up 22% from the preceding year, the company stated that it is on track to reach sales of approximately $5.4 billion in the current year.
The plunging share took a massive piece out of the net worth of Under Armour founder and chief executive officer, Kevin Plank, who is the biggest shareholder in the company and controls through a special class of stock with 10 times the voting power of the Class A shares.
CEO Kevin Plank stated that lessons from the unacceptable quarter would help keep the American clothing company’s long-term growth plan unbroken.
On Tuesday, during a conference call with analyst, Mr. Plank acknowledged that having the precise product for the right customer at the right time is the price of admission.