Oct. 28--Shares of Baltimore sports apparel company Under Armour fell more than 11 percent Tuesday over concern that sales would be soft for the rest of the year as the company deals with a weak economy and faces increased expenses from beefing up its innovation team.

There were also worries about the company's earnings next year; Under Armour officials said they didn't expect the company to make a profit in 2010 from footwear, a category that has been a major driver of the company's growth in recent years.

Under Armour shares fell $3.82, or 11.5 percent, to close at $29.27 on the New York Stock Exchange.

"I think the growth expectations in the near term concern people," said Tom Shaw, an analyst with Stifel Nicolaus who follows Under Armour. Shaw said he had accounted for an increase in footwear sales next year when analyzing the company's financial performance.

The company said it didn't expect footwear to make a profit next year as a new team works to improve its shoe offerings. In July, Under Armour announced a shake-up in leadership at its footwear division with the hiring of Gene McCarthy, the head of Timberland. Next year's sales will depend more on apparel, the company said.

Kevin Plank, Under Armour founder, chairman and CEO, said during a conference call with analysts to announce third-quarter earnings that it usually takes about 18 months to bring a new product like footwear to market.

"The investments and focus we have brought to the apparel product engine in 2009 will enable us to reaccelerate the apparel growth story in 2010 and allow us the flexibility to manage our footwear platform for growth in 2011," David McCreight, Under Armour president, said during the call with analysts.

The company's selling, growth and administrative expenses grew 21 percent in the quarter ended Sept. 30, due in part to creating the new footwear team. It was also due to the increase in the number of factory outlet stores, which the company is using to get rid of excess inventory as consumers are spending less.

Shaw said the focus on footwear doesn't worry him too much if the company is working to get the product right.

"Getting the innovation right is something that resonates better with the consumer," Shaw said. "I think it just means its less near-term growth, and people look at Under Armour as a growth story so it may concern them," Shaw added. "The growth is still here, we just will have to wait an extra year."

For the third quarter, net income for the company rose 2 percent to $26.2 million, or 52 cents per share, compared with $25.7 million, or 51 cents a share, for the same period a year ago.

Revenue rose 16 percent to $269.5 million, compared with $231.9 million the year before.

Under Armour also said it was raising its year-end revenue outlook to a range of $830 million to $835 million, partly due to the performance of the third quarter. That would be a 14 percent to 15 percent increase from last year. It had originally expected revenue of $810 million.

Apparel net revenue increased 7 percent during the quarter to $215.4 million, while footwear revenue was up 153 percent to $33 million -- mainly driven by shipments of running footwear for the back-to-school season.

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