Under Armour raises profit outlook amid declining sales

Third quarter revenues at Under Armour were down 6 percent or 7 percent currency neutral to 1.5 billion dollars.

Updating its outlook, the company said fiscal year 2024 revenue is expected to be down 3 to 4 percent, tightening the previous expectation of a 2 to 4 percent decline.

The company’s FY24 gross margin is expected to be up 120 to 130 basis points, operating income is expected to reach 287 million dollars to 297 million dollars, adjusted operating income to be 310 million dollars to 320 million dollars, diluted earnings per share to be between 57 cents to 59 cents and adjusted diluted earnings per share to be 50 cents to 52 cents.

"Despite a mixed retail environment during the holiday season, our third quarter revenue results were in line with our expectations; we were able to deliver better than anticipated profitability and remain on track to achieve our full-year outlook," said Under Armour president and CEO Stephanie Linnartz.

Under Armour posts drop in wholesale, DTC sales increase

The company’s wholesale revenue decreased 13 percent to 712 million dollars, and direct-to-consumer revenue increased 4 percent to 741 million dollars due to a 5 percent increase in company-owned and operated store revenue and a 2 percent increase in ecommerce revenue, which represented 45 percent of the total direct-to-consumer business in the quarter.

North America revenue decreased 12 percent to 915 million dollars and international revenue increased 7 percent or 4 percent currency neutral to 566 million dollars. In the international business, revenue increased 7 percent or 2 percent currency neutral in EMEA, 7 percent or 8 percent currency neutral in Asia-Pacific and 9 percent or 3 percent currency neutral in Latin America.

Apparel revenue decreased 6 percent to 1 billion dollars. Footwear revenue was down 7 percent to 331 million dollars and accessories revenue was flat at 105 million dollars.

Gross margin increased 100 basis points to 45.2 percent, operating income was 70 million dollars and adjusted operating income was 92 million dollars. Net Income was 114 million dollars, while adjusted net income was 84 million dollars. The company’s diluted earnings per share were 26 cents and adjusted diluted earnings per share were 19 cents.