Under Armour announced its Q2 earnings on Tuesday morning, reporting $1.1 billion in revenue, which was right in line with analyst expectations, and a net loss of 3 cents per share, which was better than the expected loss of 6 cents.
But Under Armour also shared that it’s cutting jobs: it will cut 280 employees globally, which amounts to 2% of its workforce.
The stock is selling off following the news, falling by as much as 9% in pre-market trading.
In an earnings press release sent to reporters on Tuesday morning, Under Armour says it has “developed a restructuring plan.”
“In this evolution, we’re pivoting,” the company wrote, noting the following ways: “From a product company to a consumer-led and category-managed brand”; “From predominantly men’s to distinct collections for men, women and kids”; “From US/mostly apparel centric to a global/apparel, footwear and accessories portfolio”; “From mainly wholesale to a more balanced, direct-to-consumer offering”; “From a historically top-line driven P&L to a return-focused, more disciplined financial model”; and finally, “From Good to Great operations.”
Under Armour shares are down 30% in 2017 so far, and 40% in the past 12 months.
The stock took a visible hit at the end of January, after Under Armour missed big on its 2016 Q4 earnings. In February, it dipped again after CEO Kevin Plank said on CNBC about President Donald Trump: “I think he is highly passionate. To have such a pro-business president is something that’s a real asset for this country.” A slew of Under Armour sponsored athletes, including Steph Curry, Misty Copeland, and Dwayne “The Rock” Johnson, publicly rejected the comments, and the company took out a full-page ad in the Baltimore Sun to clarify.
The beleaguered Baltimore sports brand has had to deal with strong headwinds: Adidas is having its strongest run in America in a decade and is stealing back market share; brick-and-mortar sporting goods chains have closed, chains on which Under Armour relied more heavily than some of its competitors; and the basketball footwear category has declined, a category in which Under Armour over-indexed.
On Under Armour’s earnings conference call, CEO Kevin Plank acknowledged the company’s need to change, but added, “We’re not going to tear up the script on what’s made us an authentic brand.”
Daniel Roberts is the sports business writer at Yahoo Finance. Follow him on Twitter at @readDanwrite.