Patrik Frisk still has something to prove to investors.

Shares of Under Armor Inc., which Frisk runs as CEO, fell 26% to $9.84 on Friday after the company posted a small loss in the last quarter and projected full-year profits below analysts’ estimates.

Like many other fashion companies, Under Armor has reorganized in recent years and Frisk argued that the company has become much stronger and healthier and is ready to take off – when the world returns to normal. normal.

But normality still seems a long way off.

Frisk acknowledged during a conference call with analysts on Friday that last quarter results “were softer than expected due to ongoing supply issues and the emerging impact of COVID-19 on our Asia- Peaceful”.

And the momentum isn’t going anywhere anytime soon.

“These trends, which we believe to be temporary, should also impact the evolution of FY23,” the CEO said.

In the “transition” quarter, which ended March 31 and sets the company’s new fiscal calendar, net losses reached $59.6 million, or 13 cents per diluted share, and compared to a profit of $77.8 million, or 17 cents, a year earlier.

Gross margins declined 350 basis points to 46.5% of sales, primarily due to higher freight costs within the global supply chain, while higher expenses and restructuring and impairment also weighed on the quarter.

On an adjusted basis, the company said losses were $3 million, or 1 cent per share.

Revenue rose 3.5% to $1.3 billion from $1.26 billion a year ago. Wholesale sales increased 4% to $829 million, with direct brand revenue reaching $441 million. Apparel revenue rose 8% to $877 million, while footwear fell 4% to $297 million and accessories fell 18% to $97 million.

Frisk reaffirmed its confidence in the company’s long-term growth potential despite “short-term headwinds”.

“The driver that makes this model work most effectively is profitable revenue growth,” he said. “This is my number one priority as CEO. We are confident that our direct-to-consumer, footwear, women’s footwear and international businesses will drive this long-term growth.

“Under Armor is a growing company with an incredible opportunity ahead of us,” he said. “Our fundamentals are solid. The underlying strength of our brand improves and our confidence remains unchanged. »

The company, which is now in the middle of its first fiscal quarter, provided an outlook that it said took into account “current visibility, including ongoing supply chain challenges, uncertainty related to COVID- 19 and inflationary trends”.

Revenue this year is expected to increase 5% to 7% with gross margins down 150 to 200 basis points. Adjusted earnings per share are expected to be between 63 and 68 cents, with the high end of that range on par with the comparable period a year ago.

Wall Street had 78 cents in pencil.

But Under Armor still has its believers – and it certainly has company when it comes to navigating a tough landscape. Kate Fitzsimons, a Wells Fargo analyst, said Under Armor faced a “tough setup as the numbers declined” but its “underlying brand health” was improving.

“While we expect Under Armor to not be alone in terms of a negative review led by macro headwinds (China, supply chain, high freight), particularly in the fiscal first quarter, we are encouraged by that the health of the Under Armor brand remains on firmer footing as we approach fiscal 2023.”

Fitzsimons also noted that the company has greater visibility into its wholesale business going forward and operates with “discipline” on inventory and spending.

And Frisk is at least keeping an eye on the horizon.

“When I look at it longer term, we will start to rebuild inventory in the second half of the year,” the CEO said. “And we will begin to recover from a revenue growth perspective as well in the second half of the year as we accelerate out of this temporary situation.”

MORE FROM WWD:

Discussions with the CEO: James Reinhart of ThredUp

Stefan Larsson’s simple plan for PVH

An offer for Kohl’s: what is Simon thinking?