While shares of Baltimore-based athletic apparel and footwear company Under Armour Inc. (UAA) have declined almost 40% decline so far this year versus the S&P 500 index’s 11.6% rally over the same period, analysts at Bernstein warn investors there's more downside to come. (See also: Buy Lululemon on Nike, Under Armour Weakness: BofA.)

In an footwear industry report, Bernstein suggests that Under Armour's recent push into sport shoes has moved the company into a “growth purgatory.”

Growth: 26 and Nix?

As Under Armour competes against U.S. rival Nike Inc. (NKE), revived German player Adidas AG (ADDYY) and a growing number of companies doubling down on the athleisure trend, such as Lululemon Athletica Inc. (LULU), Under Armour has attempted to diversify outside of men’s apparel and build out categories such as women’s, direct-to-consumer and footwear.

Bernstein, which rates UAA at underperform​ with a $14 price target, is particularly troubled by the company's efforts to revamp its footwear business, noting that the segment still remains below the $1 billion mark. “Sales in the category declined for Under Armour in Q2, the first time that this has happened since 2010, as reviews by running experts continue to rank Under Armour lower than major competition in quality and as some product launches (e.g. the Curry 3) have, by the company's own admission, disappointed,” read the note.

Bernstein highlighted international sales as an “interesting growth opportunity” for Under Armour, as the segment currently makes up just 16% of total revenue. Yet while the firm is expanding further into new regions, global expansion is not expected to offset a slowdown in the U.S., writes the investment firm. Ultimately, Bernstein remains unconvinced that Under Armour will be able to get back to the 20% growth figures it had sustained for 26 consecutive quarters. (See also: Nike, Under Armour Shares Slip on Adidas Pressure.)

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