The Clap
Under Armour has built up a lot of inventory due to decreasing demand due to inflation.
The Deets
According to Reuters, Under Armour cut its annual forecasts due to decreasing demand. With covid restrictions easing, a lot of products will hit stores at a time when people aren’t looking to buy unnecessary items.
Why this Matters
To not get stuck with excess inventory, Under Armour needs to lower its margins and participate in promotions and discounts.
What does this mean?
Gross margins are now expected to drop by up to 4.25% while profit is expected to be $0.47-$0.53 per share, down from $0.63-$0.68.
Adidas made a similar move last week.
Too much supply? Under Armour facing unusual hiccup 🏋️♂️
