Written by Brenda Nakalema

Under Armour Meets Profit Estimates but Cuts Earnings Forecast. The Stock Rises.

Under Armour (ticker: UAA) delivered lots of bad news about the future, and in the last quarter, its performance was …

Under Armour (ticker: UAA) delivered lots of bad news about the future, and in the last quarter, its performance was merely okay.

Fiscal first-quarter results matched estimates, with the company delivering 3 cents in adjusted earnings per share on sales of roughly $1.3 billion. However, investors had a lot to discuss regarding the company’s forecast. For the full year ending March, the company said it expects adjusted earnings to fall between 47 cents to 53 cents, an estimation that falls short of analyst’s expectations of 62 cents. In May, management had forecast between 63 cents and 68 cents per share for the entire year.

The larger-than-expected drop in margins was partly blamed on the higher promotional activity the company engaged in. It’s estimated to decline by up to 4.25% compared to the previous year; management had initially forecast a 2% decline.

Operating income or the adjusted revenue after subtracting expenses of the operation is expected to stand at $300 to $325 million, again lower than the previous figures of $375 million to $400 million.

Under Armour (ticker: UAA) stock climbed roughly 2%, landing at $9.42 in premarket trading after climbing up over 6% following the announcement of earnings. The stock is down more than 54% this year and fell by nearly 1% in anticipation of earnings on Tuesday. The rally signals that investors do not expect the company’s performance to get any worse.