Two weeks ago, Under Armour (NYSE:UA) warned us that we wouldn't like its fiscal 2008 results. Yesterday, it reported 'em, and guess what? Investors didn't like 'em.

Shares have dropped more than 6% in response to Under Armour's confirmation that it grew full-year sales by 20%, but shrank full-year profits 27% (to $0.77 per share). And I'm just guessing here, but I suspect investors especially didn't like the news that fourth-quarter sales grew an anemic 2.5% while profits shrank by half.

Don't say you weren't warned
I certainly understand the displeasure (and for reasons explained in a previous story, I think this feeling will emerge again when UA retailers like Cabela's (NYSE:CAB) and Dick's Sporting Goods (NYSE:DKS) report their own earnings over the next couple of months).

Sure, Under Armour's now pulling down profit margins inferior to those of more pedestrian rivals like Deckers Outdoor (NASDAQ:DECK), Nike (NYSE:NKE), and Columbia Sportswear (NASDAQ:COLM). Yes, its profits are moving in the wrong direction, and opposite to sales. But remember: The two key items we're looking for from Under Armour these days are inventories restraint and cost control. Here's how it's faring on those fronts:

Inventories
Sears Holdings (NASDAQ:SHLD) recruit David McCreight did a bang-up job restraining runaway inventory growth last year. Despite adding a new line of running shoes, Under Armour's inventories stood just 10% higher at year-end 2008 than they did one year before. Relative to the company's 20% growth in sales, that's good news; it means McCreight is delivering on his boss's promise to prevent inventories from growing faster than revenues. (And long-term, this should bolster the brand by preventing an inventory glut that would eventually need to be cleared out at fire-sale prices.)

Cost control
With inventories now in hand, costs appear likely to become the new "issue" for Under Armour. Selling, general, and administrative (SG&A) expenses for the year grew 27% in comparison with fiscal 2007 -- faster than overall sales growth. Similarly, in the fourth quarter, SG&A spending was up 9%, again outpacing sales.

Foolish takeaway
This, then, is what the company must accomplish in fiscal 2009: Get operating costs under control. Eroding gross margins probably can't be helped; they're lower in footwear than in clothing, and that's just a fact of life. But SG&A spending is something management can get a handle on. It must, if it's ever going to get back to growing the bottom line for shareholders.

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Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool has a disclosure policy.

Under Armour, Columbia Sportswear, and Cabela's are Motley Fool Hidden Gems recommendations. Sears Holdings is an Inside Value selection. Under Armour is a Rule Breakers pick. The Fool owns shares of Under Armour.