US sportswear retailer Under Armour Inc. (NYSE:UA) announced plans to cut 280 jobs as it lowered its guidance for 2017 revenue.
The company said it now expects revenue to rise 9% to 11%, compared to its previous estimates for 11% to 12% growth, as it undergoes a restructuring that will result in a 2% reduction in its global workforce.
Under Armour sees adjusted earnings for the full year of between 37 cents and 40 cents per share, excluding any impact from the business overhaul. Analysts had expected earnings of 42 cents per share.
Shares fell 2.85% to US$19.45 in US pre-market trading.
Chief executive Kevin Plank said the group plans to expand its digital capabilities to address the shift in consumer spending habits towards online shopping. The company will also speed up the process of getting products to the market.
"We've identified a number of areas to enhance our operational capabilities, drive process improvement and gain greater efficiencies," Plank said in a statement.
"We are utilising 2017 to ensure that operations across our diverse portfolio of sport categories, distribution channels and geographies are optimized as we are building a stronger, faster and smarter company.”
The group expects to incur pre-tax charges of US$110mln to US$130mln in 2017, including expenses related to facility and lease terminations, employee severance and benefit costs and contact terminations.
Second quarter revenue rose 8.7% to US$1.09bn, as a strong performance in sales of men’s and women’s training and golf items offset the impact of a promotional US retail environment.
Including other interest and expenses, the net loss was US$12.3mln, compared to profit of US$6.3mln the previous year. Expenses increased 10% to US$503mln, due to investments in the direct-to-consumer, footwear and international businesses.