The overall market was volatile today -- stocks were in positive territory this morning after the Federal Reserve said it would immediately cut lending rates by half a percentage point, but in the afternoon news of the coronavirus spreading, and more reports of deaths and infections, overwhelmed the market. Meanwhile, the lack of a substantive plan from the G-7 nations and the U.S. government to combat the virus may have also contributed to the afternoon sell-off.
Class A shares of Under Armour were down as much as 6.4% in afternoon trading and had fallen 3.5% as of 3:10 p.m. EST. By comparison, the S&P 500 index was down 1.9% at that time.
There was no direct news out on Under Armour today, but Kohl's (NYSE:KSS), one of its retail partners, did report better-than-expected earnings this morning. Kohl's also talked positively about Under Armour on its earnings call, saying there was strength in the brand during the holiday quarter, and sees growth potential for its women's line and other areas.
Normally, such remarks would be a boon for a company, but analysts have said in the past that the partnership could be harming Under Armour's brand, as selling at a mid-market retailer like Kohl's makes it difficult for Under Armour to retain its premium image.
The stock is also down on coronavirus fears as, like most apparel companies, Under Armour counts on China for manufacturing and sees it as a valuable growth market. The outbreak forced the closure of some of the stores that sell its wares in China and is also causing delays in shipments.
Before the coronavirus scare, Under Armour was already reeling. The company offered an ugly outlook for 2020 as it sees revenue falling by low-single digits and North American revenue down mid- to high-single digits. That follows a year when revenue grew just 1%. The company can ill-afford any additional setbacks, yet the COVID-19 coronavirus outbreak appears to be just that. It's no wonder the stock hit a 52-week low today. It's going to take a lot for Under Armour to get off the mat.