Under Armour warns of bigger Middle East hit, cuts annual gross margin growth target

Nov 6 (Reuters) - Under Armour UAA.N on Friday warned of a bigger hit to its operating income from the Middle East conflict and lowered its annual gross margin growth forecast, sending its shares down about 12% in premarket trading.

The athletic apparel maker joins a string of companies across industries that anticipate higher transportation and supply-chain costs due to the surge in oil prices triggered by the Iran war.

Here are some details:

• The company expects annual gross margin to increase 170 to 220 basis points, slower than its prior view of a 220 to 270 basis-point improvement

• Under Armour's quarterly revenue fell about 7% to $1.24 billion from a year ago, slightly above analysts' average estimate of $1.23 billion, according to data compiled by LSEG

• The company posted breakeven quarterly adjusted earnings, compared with estimates of a 1-cent loss per share

• Net revenue at its North American segment, a major revenue contributor, fell about 7% to $737.2 million in the quarter ended September 30

• Under Armour forecast a roughly $45 million impact from the Middle East conflict, up from the prior view of $35 million

• It expects higher prices and refunds from IEEPA tariff expenses to help support margins for fiscal 2027