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Under Armour cuts FY profit outlook

By Huw Hughes

Aug 3, 2022

Business

Image: Under Armour

Under Armour has lowered its full-year profit guidance as it expects higher promotional activities to cut into its margins.

That came despite the company’s first-quarter earnings matching Wall Street expectations.

In the three months to June 30, revenue at the US sportswear company was flat at 1.3 billion dollars compared to the prior year, with wholesale up 3 percent, but direct-to-consumer down 7 percent.

Breaking it down by geography, North America revenue was flat at 909 million dollars, while international revenue dropped 3 percent to 431 million dollars.

Footwear revenue increased 1 percent to 347 million dollars, while apparel revenue was down 1 percent to 868 million dollars, and accessories revenue decreased 13 percent to 97 million dollars.

Under Armour remains profitable in Q1

The company made a net income of 7.68 million dollars, down from 59.21 million dollars a year earlier.

Based on its first-quarter results, Under Armour lowered its annual profit outlook and now expects adjusted diluted earnings per share of between 0.47 dollars and 0.53 dollars, compared to its previous estimate of between 0.63 dollars and 0.68 dollars.

But the company still expects year-on-year revenue growth of between 5 percent to 7 percent.

“We delivered our quarter, are holding our full-year revenue outlook, and remain bullish on our brand strength while we navigate the current environment,” Under Armour Interim president and CEO Colin Browne told investors.

He continued: “Moving forward, we are digging in to amplify the strengths of our core strategy while creating additional opportunities for athletes to wear UA throughout their day.

“I have full confidence in the exceptional capabilities of our global team to deliver more pronounced growth and profitability over the long term.”

UNDER ARMOUR