On the same day when Baltimore’s beloved Under Armour reported it missed targets for share growth and revenue in the final quarter of 2016, the company also announced the departure of its chief financial officer.
Chip Molloy, previously the CFO of PetSmart, has been in charge of Under Armour’s financial operations for about a year. The company said in a statement today that he is leaving “for personal reasons,” but did not elaborate. Senior vice president of corporate finance David Bergman will take over this week for Molloy, who will stay on board through next month as an adviser.
The news came as the company announced it missed shares growth and revenue targets for the fourth quarter of last year. Founder and CEO Kevin Plank said in a statement that his company “once again posted record revenue and earnings” in 2016, but that “numerous challenges and disruptions in North American retail tempered our fourth quarter results.”
One of the challenges Plank referenced in his statement was the recent bankruptcies of sporting goods retail outlets like City Sports and Sports Authority.
Under Armour’s net revenue grew 12 percent in the fourth quarter of 2016 — a great mark for many firms, but the smallest fourth-quarter growth in eight years for the company, according to CNBC. Net income for the fourth quarter fell from $105.6 million in 2015 to $104.9 million last year.
Under Armour continued its rapid growth from past years, achieving a staggering 23-percent revenue increase, matching its trend for average annual growth since 2012. However, the company set a much lower projection for 2017 revenue growth: 11 to 12 percent, half the average mark from past years.
The announcement shook investors. Share prices declined 24.5 percent through 10:45 a.m. this morning.
Plank said the company is planning to invest more heavily in its products in the coming year. This corresponds to another projection that has spooked investors: an estimated $100 million drop in operating revenue for 2017.
And yet, Plank remained optimistic in a statement. “The current environment represents an inflection point to maximize our unique strengths by staying on offense – investing smartly in innovation, deepening our Brand connection with consumers and amplifying our focus on operational excellence – positioning Under Armour as a stronger company,” he said.
Plank says now is the time for Under Armour to invest in its new tech suite of tech products. He may be right, but his South Baltimore-based company is eyeing a very different year, financially speaking.
