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Under Armour Q2 revenues increase 8 percent

By Prachi Singh

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Business

Under Armour, Inc. revenues for second quarter ended June 30, 2018 increased 8 percent or 7 percent currency neutral to 1.2 billion dollars. Net loss for the quarter, the company said, was 96 million dollars, and excluding the impact of the restructuring plan, adjusted net loss was 34 million dollars, while diluted loss per share was 0.21 dollar and adjusted diluted loss per share was 0.08 dollar.

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"The ongoing improvements in our structure, systems and go-to-market process across our global business better position us to drive a more consistent, predictable path to deliver for our consumers, customers and shareholders over the long-term," said Under Armour Chairman and CEO Kevin Plank in a statement.

Review of Under Armour’s second quarter performance

The company said, revenue to wholesale customers increased 9 percent to 710 million dollars and direct-to-consumer revenue was up 7 percent to 414 million dollars, which represented 35 percent of global revenue in the quarter.

North America revenue increased 2 percent or 1 percent currency neutral to 843 million dollars and the international business delivered growth of 28 percent or 24 percent currency neutral to 302 million dollars, representing 26 percent of total revenue. Within the international business, revenue in EMEA was up 31 percent or 25 percent currency neutral, up 34 percent or 28 percent currency neutral in Asia-Pacific and up 7 percent or 12 percent currency neutral in Latin America.

The company added that apparel revenue increased 10 percent to 747 million dollars, driven by strength in training and running, while footwear revenue was up 15 percent to 271 million dollars with strength in running and team sports. Accessories revenue decreased 14 percent to 106 million dollars due to softer demand.

Gross margin decreased approximately 110 basis points to 44.8 percent and adjusted gross margin decreased 60 basis points to 45.3 percent. Operating loss was 105 million dollars, while adjusted operating loss was 20 million dollars.

Under Armour updates FY18 outlook

The company said, for fiscal 2018, net revenue is now expected to increase approximately 3 percent to 4 percent reflecting a low to mid-single-digit decline in North America and international growth of greater than 25 percent. From a product perspective, apparel is expected to grow at a mid-single digit rate, footwear at a low-single digit rate, and accessories is expected to decline at a low-single digit rate.

Gross margin is now expected to be flat to down slightly versus the prior year rate of 45.0 percent. Adjusted gross margin is now expected to improve slightly compared to 2017 as benefits from product costs and lower planned promotional activity are offset by increased inventory management actions. Excluding the impact of the restructuring efforts, adjusted diluted earnings per share are expected to be in the range of 0.14 dollar to 0.19 dollar.

Picture:Facebook/Under Armour

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