Under Armour reportedly explores exit of tennis, outdoor categories
- Kip Fulks, a longtime partner at Under Armour with CEO Kevin Plank, will take a sabbatical from the company, The Wall Street Journal reports.
- The sportswear company is also exploring the exit of its tennis and other outdoor categories, according to sources who spoke with the Journal.
- Under Armour shares have declined more than 40 percent in 2017.
Meantime, the athletic apparel and shoe maker is also exploring the exit of its tennis and other outdoor categories, according to sources familiar with the matter who spoke to the Journal.
Under Armour shares dropped Tuesday afternoon on the news, with the stock shedding more than 3 percent in afternoon trading. Under Armour shares have declined more than 40 percent in 2017.
Fulks has changed roles numerous times while at Under Armour. Most recently, he held the title of strategic advisor, having worked in product, marketing, sourcing and operations.
Fulks began his leave from work earlier this month, sources told the Journal. Notably, the sabbatical is a company benefit available to all employees with 10 years of service.
Plank and Fulks were college classmates.
As Under Armour struggles to grow in an increasingly competitive sportswear market, sources also told the Journal that the company is thinking about getting out of its smaller businesses, such as outdoor gear and fishing.
A representative from Under Armour declined to comment on these details.
Under Armour recorded its first losses as a public company earlier this year, and shares hit a record low when the retailer reported second-quarter earnings in August. At the time, Under Armor also announced plans to cut about 2 percent of its global workforce.
"After 6½ years of more than 20 percent top-line growth that ended in the fourth quarter of last year, we are clearly operating in a different environment, particularly in our largest market [of] North America," Plank said on a conference call with analysts and investors.
In August, Under Armour trimmed its earnings and sales expectations for the full year, as its gross margins remain under pressure.
The retailer expects adjusted earnings for the full year to fall between 37 cents and 40 cents per share, excluding any impacts from restructuring. Analysts had been forecasting Under Armour to earn 42 cents a share in 2017, according to Thomson Reuters estimates.
Under Armour expects full-year revenue to grow 9 to 11 percent, lower than its previous forecast of 11 to 12 percent growth.
Under Armour is set to report third-quarter earnings on Oct. 31.
WATCH: Under Armour may exit tennis, outdoor categories
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