Under Armour reveals 'solid growth' despite 'challenging consumer' environment
Under Armour has today announced flatlining financial results for the first quarter of fiscal 2024, ending 30 June. For example, reported revenues were down by just 2% to £1 billion ($1.3 billion).
Wholesale revenue decreased by 6% to £581 million ($742 million). However, direct-to-consumer revenue increased by 4% to £426 million ($544 million) thanks to an increase in e-commerce revenue, which represented 40% of the total direct-to-consumer business in the quarter.
The report also revealed:
- North America's revenue decreased 9% to £648 million ($827 million), and international revenue increased 12% to £380 million ($485 million).
- Apparel revenue was down by 5% to £647 million ($825 million), footwear revenue was down by 5% to £285 million ($364 million), but accessories revenue was up by 1% to £76 million ($98 million).
- Gross margin declined 60 basis points to 46%, driven primarily by higher promotions and adverse effects from changes in foreign currency.
- Operating income stood at £16 million ($21 million).
- Net Income was £7 million ($9 million).
- Diluted earnings per share was £0.016 ($0.02).
Under Armour President and CEO, Stephanie Linnartz, commented: "We're pleased with how we have navigated our start to fiscal 2024.
"Our international and direct-to-consumer businesses, both of which realised solid growth in the quarter, continue to deliver aside a challenging consumer retail environment in North America. Based on this performance, we are maintaining our outlook for fiscal 2024."
Looking forward, the company made no changes to its fiscal 2024 outlook, which it provided on 9 May. Under Armour expects revenues to be flat or up slightly. Gross margin is expected to be up 25 to 75 basis points. Operating income is expected to reach £243-£258 million ($310-$330 million).
Linnartz continued: "As we continue executing against our Protect This House 3 strategic priorities, including our prioritization of North America, we have taken several important steps. These steps include leadership changes, amplifying storytelling to drive global brand heat, and optimizing our product engine to deliver elevated design and groundbreaking innovations that athletes covet.
"I am confident that we will achieve the improved growth and profitability this brand is capable of over the long run."
Earlier this year, Under Armour appointed Carolyn Everson and Patrick Whitesell to its Board of Directors to help drive company growth.
