What happened

Shares of Under Armour (NYSE:UA)(NYSE:UAA) were down 13.7% and 12.5%, respectively, at 12:28 p.m. EDT on Tuesday, following the release of the company's second-quarter results this morning. At the open, shares were down more than 18%.

So what

Under Armour reported revenue of $1.2 billion, slightly below expectations of $1.21 billion, and a net loss of $0.04 per share, a little better (less worse?) than the $0.05 loss Wall Street's prognosticators were expecting. So that's a mixed bag against analyst estimates.

UNDER ARMOUR CONTINUES TO STUMBLE IN NORTH AMERICA. IMAGE SOURCE: GETTY IMAGES.

So why the beating? In short, results in North America likely played some role. Sales declined once again in the company's biggest market, unfortunately at an even faster rate -- 3.2% -- than the 2.8% decline in the first quarter. Moreover, the company's operating margins worsened sequentially in every geographical segment, driving a $105 million operating loss after generating $35 million in operating income in the first quarter.

But moving beyond the sequential weakening of its segment operating results, operating margins improved year over year in every segment except Asia-Pacific, while gross margin of 46.5% was better than last year and the first quarter, a sign that Under Armour's investments in supply chain and other cost-containment improvements are working.

Now what

North America continues to plague the company, even as competitors such as Nike are now growing sales here. Yet management didn't carry its weak results in North America over to full-year guidance. The company still expects to grow overall revenue 3% to 4% for the year, though it did change the mix to a "slight decline in North America and a low- to mid-teen percentage increase in the international business," after previously forecasting flat North American sales and low double-digit international sales growth.

Moreover, management expects to see gross margin increase by the same range of 110 to 130 basis points, and raised its expectation for operating income to a range of $230 million to $235 million, from $220 million to $230 million previously.

Lastly, investors should consider this: Under Armour shares had gained more than 50% since the beginning of the year before today's big sell-off. Simply put, there's a very good chance that a lot of today's selling isn't really related to the company's earnings results per se, but more just short-term traders taking profits after the run-up so far this year.

For long-term investors, sure, the weakness in North America should be concerning. But this quarter didn't really offer any major worsening in the company's trajectory to justify a double-digit sell-off.

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