Under Armour "on track" to achieve full-year outlook despite falling sales

US sportswear brand Under Armour delivered better-than-expected profitability in the third quarter ending 31 December 2023, despite revenue being down 6% to £1.1 billion ($1.5 billion).

Wholesale revenue decreased 13% to £564 million ($712 million), but direct-to-consumer revenue grew 4% to £587 million ($741 million) due to a 5% rise in store sales and 2% increase in e-commerce sales.

Apparel revenue decreased 6% to £793 million ($1 billion), while footwear revenue was down 7% to £262 million ($331 million), and accessories revenue remained flat at £83 million ($105 million).

Revenue in North America decreased 12% to £725 million ($915 million), but increased 7% to £449 million ($566 million) internationally. Revenue lifted 7% in EMEA, 7% in Asia-Pacific, and 9% in Latin America.

Gross margin increased by 100 basis points to 45.2%, driven by supply chain benefits related to lower freight expenses, partially offset by proactive inventory management actions, including a higher percentage of sales to the off-price channel and increased promotional activities in the company’s direct-to-consumer business.

Looking ahead, revenue is expected to be down 3-4% in FY24, tightening the previous expectation of a 2-4% decline. Gross margin is expected to be up 120-130 basis points, an increase from the prior expectation of a 100-125 basis points.

Stephanie Linnartz, President and CEO of Under Armour, said: "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.

"As we close out fiscal 2024 and our strengthened leadership team begins to come up to speed in the quarters ahead – we are working to reset Under Armour toward a path of improved revenue growth and enhanced value creation in the future."