What happened

Shares of Under Armour (NYSE:UA)(NYSE:UAA) were down 11.2% as of 3:15 p.m. EST Wednesday as the market was underwhelmed by revised guidance provided by the athletic apparel and footwear specialist at an investor meeting today.

More specifically, Under Armour just unveiled a new long-term strategic plan targeting a return to low double-digit growth by 2023, including a mid- to high-single-digit compound annual growth rate (CAGR) over the next five years led by its international and direct-to-consumer (DTC) businesses. Under Armour also expects to increase its earnings per share at a five-year CAGR of roughly 40%. 

Interior of Under Armour's Chicago Brand House

IMAGE SOURCE: UNDER ARMOUR.

So what

Those targets look good at first glance. But some investors are balking that they assume more modest low-single-digit annual growth over the next five years from the company's core North American segment, which represented nearly two-thirds of total sales through the first three quarters of 2018.

Speaking of which, Under Armour revised its 2018 outlook to call for gross margin to be roughly flat on a year-over-year basis, marking a slight improvement from "flat to down slightly" from 45.1% in 2017. Under Armour also now expects to incur a 2018 operating loss of $40 million to $55 million, widened from its previous range of a $50 million to $55 million loss. And on the bottom line, the company now expects to generate adjusted (non-GAAP) earnings per share this year of $0.21 to $0.22, compared to its old range of $0.19 to $0.22. However -- and though we don't typically pay close attention to Wall Street's demands -- most analysts were already modeling 2018 earnings near the high end of that range.

Looking ahead to fiscal 2019, Under Armour is targeting revenue growth of 3% to 4%, assuming flat sales in North America and low double-digit growth internationally, which should translate to earnings per share of $0.31 to $0.33. Here again, consensus estimates were predicting 2019 earnings closer to $0.35 per share on revenue growth of 5%.

Now what

Of course, given its relative outperformance of late -- the stock surged more than 20% in late October, for example, after Under Armour posted strong third-quarter results relative to expectations -- there's always room for Under Armour to over-deliver as it implements its strategic vision in the next few years. In the meantime, however, its seemingly conservative goals appear to have left the market wanting more.

Steve Symington owns shares of Under Armour (C Shares). The Motley Fool owns shares of and recommends Under Armour (A Shares) and Under Armour (C Shares). The Motley Fool has a disclosure policy.