Despite profit decline, Under Armour exceeds expectations in Q3

Business

An Under Armour store in Boston Image: Under Armour.

US sportswear provider Under Armour Inc. exceeded expectations in the third quarter of fiscal 2024/25, despite a significant decline in profits. On Thursday, the company subsequently announced a slightly more optimistic outlook for the full year.

In the period from October to December, Under Armour generated revenue of 1.40 billion US dollars. Revenues thus fell short of the prior-year quarter by 6 percent (currency-adjusted -6 percent), but were significantly higher than previously forecast.

EMEA region sees revenue growth

Revenue in North America declined by 8 percent to 844 million US dollars, while international business decreased by 1 percent (currency-adjusted -2 percent) to 558 million euros. A 5 percent increase (currency-adjusted +3 percent) in the EMEA region, which encompasses Europe, the Middle East, and Africa, was not enough to offset declines in the Asia-Pacific region (-5 percent, currency-adjusted -6 percent) and Latin America (-16 percent, currency-adjusted -9 percent).

Thanks to lower product and freight costs, as well as reduced markdowns, the gross margin improved from 45.1 to 47.5 percent. However, operating income fell by 81 percent to 13.5 million US dollars due to higher selling, general and administrative expenses and restructuring charges. Net income, which was 110.8 million US dollars in the prior-year quarter, dropped to 1.23 million US dollars.

Management takes a slightly more optimistic view of the remainder of the year

In light of the results, management updated its full-year guidance. It now expects a 10 percent decline in revenue for 2024/25, after previously anticipating a decline in the "low double-digit percentage range."

The forecast for adjusted operating income was raised from 165 to 185 million US dollars to 185 to 195 million US dollars. The target range for reported diluted loss per share is now 0.48 to 0.50 US dollars. Previously, a corresponding loss of between 0.48 and 0.51 US dollars had been expected for the current year.

This article originally appeared on FashionUnited.DE. It was translated to English using AI and edited by Rachel Douglass.

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