Under Armour lowers full-year revenue forecast as Q2 sales flatten
Revenue declined 8% to $53.7m (£43.7m) in Latin America
Under Armour has lowered its full-year revenue forecast as its revenues stagnated in Q2.
In the three months to 30 September its revenues dropped 1% to $1.6bn (£1.3bn). Wholesale revenues also fell 1% to $940m (£765m).
As such, Under Armour stated that it now expects full-year revenues to be down 2 to 4% versus the previous expectation of “flat to up slightly.”
However, it confirmed gross profit was up 5% year on year to $752m (£612m). Its gross margin also increased 260 basis points to 48.0%, driven primarily by supply chain benefits related to lower freight expenses, partially offset by a channel mix impact related to a normalisation of off-price sales.
Direct-to-consumer revenue was also up 3% to $596m (£485m) due to a 2% increase in e-commerce revenue, which represented 35% of the total direct-to-consumer business in the quarter, and a 4% increase in owned and operated store revenue.
Meanwhile, North America revenues decreased 2% to $991m (£806m), and in the international business, EMEA revenues increased 9% to $287m (£233m) and 3% to $232m (£188m )in Asia-Pacific .
Revenue declined 8% to $53.7m (£43.7m) in Latin America.
Additionally, under its revenues by category, apparel and accessories revenues increased 3% to $1.1bn (£814m) and $114m (£92.71m), respectively.
Footwear revenue, on the other hand, fell 7% to $351m (£285.4m).
Stephanie Linnartz, Under Armour president and CEO, said: “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.”
“As we execute against our strategic priorities, we will continue to take a balanced approach to driving profitability in the near term while taking the necessary steps to invest in the talent, systems, and processes to drive the top-line growth that Under Armour is capable of over the long term.”
