“Our second quarter fiscal 2025 performance demonstrates that our strategy to reconstitute the Under Armour brand and establish a more premium position in the marketplace is gaining traction. With better-than-expected results, we are pleased to raise our full-year profitability outlook while simultaneously increasing marketing investments to amplify our brand”, commented Kevin Plank, President and Chief Executive Officer at Under Armour.

Under Armour reported an 11% decline in revenue in the second quarter of fiscal 2025, as compared to the same period in fiscal 2024, totalling 1.4 billion US dollars. North American revenue fell by 13% to 863 million US dollars, while international revenue declined by 6% to 538 million US dollars year-over-year.

By channel. Direct-to-consumer revenue decreased by 8% in this second quarter, driven by a 21% decline in e-commerce revenue on a comparable basis. Wholesale revenue fell by 12% to 826 million US dollars, as compared to the last fiscal year.

In contrast, the company’s gross margin improved by 200 basis points, as compared to the same period in fiscal 2024, due to lower product and freight costs, a favourable channel mix and reduced discounting.

Operating expenses fell by 15% to 520 million US dollars, as compared to the last fiscal year, reflecting lower transformation and litigation-related expenses.

The company's adjusted operating income for the quarter stood at 166 million US dollars, while adjusted net income was 131 million US dollars, with adjusted diluted earnings per share of 0.30 US dollars.

Inventory levels decreased by 3% year-over-year, ending the quarter at 1.1 billion US dollars. The company also reported 531 million US dollars in cash and cash equivalents, with no outstanding borrowings under its 1.1 billion US dollar revolving credit facility.

Updated Fiscal 2025 Outlook

Under Armour has adjusted its fiscal 2025 outlook and now expects its revenue to decline by a low double-digit percentage, driven by a 14-16% decrease in North America’s sales. Gross margin improvements are expected to range between 125 and 150 basis points.

Operating loss is projected to be between 176 million and 196 million US dollars. However, adjusted operating income could reach 165 million to 185 million US dollars, reflecting stronger-than-expected profitability this year.

Under Armour also plans to increase marketing investments by 25 million US dollars to accelerate growth. The company has revised its adjusted diluted earnings per share, expected to be between 0.24 and 0.27 US dollars.