Companies

Under Armour reports better-than-expected results

Nov 13, 2023 United States

The US-based company posted a better-than-expected second quarter performance, but due to the challenges faced in the North American region, it decided to lower its revenue guidance for fiscal 2024

“Our second quarter results, particularly profitability, exceeded our expectations. Consequently, we are maintaining our fiscal 2024 operating income and EPS outlook even as we lower our revenue expectations primarily in response to challenges in North America during the back half of the year”, commented Under Armour President and CEO Stephanie Linnartz.

Second Quarter Results

In the second quarter of fiscal 2024, the company’s revenue remained stable (or down by 1% currency neutral) at 1.6 billion US dollars, on a comparable basis to the same period of last fiscal year.

In this period, the wholesale segment contributed 939.7 million US dollars to the total revenue, down by 1%, while the direct-to-segment segment generated 595.8 million US dollars, up by 3%, as compared to the second quarter of the previous year; e-commerce accounted for 35% of the direct-to-consumer revenue. ´

The North American region recorded a revenue decline of 2% in the three months to the end of September to 991.4 million US dollars, on a comparable basis to a similar period of the prior fiscal year. At an international level, Under Armour’s revenue increased year-over-year by 9% in the EMEA region to 287.1 million US dollars and by 3% in the Asia-Pacific region to 232.1 million US dollars, but decreased by 8% in the Latin America region to 53.7 million US dollars.

By segment. In the second quarter of the current fiscal year, the company’s apparel revenue totalled 1.1 billion US dollars, increasing by 3%, and the accessories segment revenue amounted to 113.9 million US dollars, growing by 3%, as compared to the second quarter of last fiscal year; meanwhile, the footwear revenue was down by 7% year-over-year, reaching 351.2 million US dollars.

In the three months to the 30^th of September, Under Armour’s gross margin improved by 260 basis points from the same period of the prior year to 48%, due to “supply chain benefits related to lower freight expenses, partially offset by a channel mix impact related to a normalization of off-price sales”.

The US-based company’s net income totalled 109.6 million euros, or 0.24 US dollars per diluted share, on a comparable basis to the net income of 86.9 million US dollars, or 019 US dollars per diluted share recorded in the second quarter of fiscal 2022.

Fiscal 2024 Guidance

Due to the challenges faced in the North American region during the first half of the year, Under Armour has decided to reduce its revenue guidance for fiscal 2024. It now expects it to decrease between 2% to 4%, as compared to the previous expectation of “flat up to slightly”. The outlook for diluted earnings per share, however, remains unchanged at between 0.47 US dollars and 0.51 US dollars.

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United States Footwear Quarter Results Results Sportswear Under Armour