Shares of Under Armour got a lift on Tuesday morning before markets opened after it maintained its outlook for the fiscal year and posted better-than-expected profits.
In the fiscal first quarter, the sportswear brand reported that revenue was down 2 percent to $1.3 billion. Net income was $9 million, with diluted earnings per share of 2 cents. Analysts surveyed by Yahoo were looking for a 2 cent loss per share and $1.3 billion in revenues
Under Armour president and CEO Stephanie Linnartz said in a statement that she was pleased with the company’s start to the fiscal year, despite a “challenging consumer retail environment in North America.”
Like other footwear brands this quarter, Under Armour’s business in North America was challenged as the region grapples with inventory excesses and conservative orders from wholesale retail partners. Revenue in the region declined 9 percent to $827 million, though international revenue increased 12 percent to $485 million.
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By channel, wholesale revenue declined 6 percent to $742 million, and direct-to-consumer revenue increased 4 percent to $544 million, driven by a 6 percent bump in e-commerce revenue and a 3 percent increase in owned store revenue. Apparel revenue was down 5 percent to $825 million, footwear revenue was up 5 percent $364 million and accessories increased 1 percent to $98 million.
Linnartz reaffirmed Under Armour’s commitment to its Protect This House 3 (PTH 3) plan, a new strategy meant to revamp its business, which involves focusing on reinvigorating brand DNA, key product areas and growing business in North America.
As part of this plan, Under Armour in June cut 50 roles across various units in its corporate workforce to help reduce expenses and move toward profitability, and it also announced a slew of executive changes.
“As we continue executing against our Protect This House 3 strategic priorities, including our prioritization of North America, we have taken several important steps,” Linnartz said. “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.”
Under Armour reiterated its outlook for fiscal year 2024, which projects revenue to be flat to up slightly and diluted earnings per share between 47 cents and 51 cents.
