Under Armour Inc. (UA.N) plunged as much as 20 per cent after it warned that its all-important North American region continues to struggle amid a dragging transition toward more full-price sales.

The company projected a “slight decline” in full-year North American revenue, with total revenue still expected to rise 3 per cent to 4 per cent on a stronger-than-expected increase in international sales.

The athletic-gear brand is mired in a difficult transition away from heavy discounting, part of a corporate revamp that’s “two quarters into a five-year plan,” Chief Financial Officer Patrik Frisk said on a conference call Tuesday.

The shares took their worst tumble since October 2017, falling as low as US$22.05. The stock had been rising steadily since January, up 55 per cent through Monday.

North America remains a critical area of focus for investors. Domestic sales are a large majority of the company’s business, and while a second-quarter dip in the region was expected, investors saw the warning of further declines as ominous.

Gross margin expanded for the fourth consecutive quarter. Coupled with shrinking inventory, which remains at a three-year low, those metrics indicate that the company is achieving Chief Executive Officer Kevin Plank’s goal of becoming more efficient and selling more items at full price.

“While we don’t think we’re in a perfect place yet, we’re in a better one,” Plank said on the conference call.

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Under Armour received praise in May from two of its biggest retail partners, when executives at Dick’s Sporting Goods Inc. and Kohl’s Corp. lauded the brand’s sales growth. That hasn’t convinced everyone. Susquehanna Financial Group analyst Sam Poser said last week that his firm’s research says some major retailers plan to downscale their Under Armour purchases by double-digit percentages.

Under Armour’s second-quarter loss was 3 cents a share excluding items, the Baltimore-based company said Tuesday, better than analyst estimates of a 5-cent loss. Sales of US$1.2 billion were in line with expectations.