Under Armour sees dip in profits amid decline in sales

Under Armour has reported a 25% dip in operating income to $70m (£55m) for the three months to 31 December 2023, amid a 6% decline in revenues to $1.5 billion (£1.2bn).

The group also reported an adjusted operating income of $92m (£72m). Under Armour stated that the drop in revenue was driven by a 13% decline in wholesale revenue to $712m (£564m) and a 12% drop to $915m (£725m) in North America revenue.

Apparel revenue also decreased 6% to $1bn (£800m) while footwear revenue was down 7% to $331m (£262m). Accessories revenue remained flat at $105m (£83.2m).

However, direct-to-consumer revenue increased 4% to $741m (£587m) due to a 5% increase in owned and operated store revenue and a 2% increase in ecommerce revenue – which represented 45% of the total direct-to-consumer business in the quarter.

Revenue in EMEA and Asia-Pacific also increased 7% to $284m (£225.2m) and $212m (£168m) respectively, while sales in Latin America were up 9% to $69m (£54.7m).

Looking ahead, the group expects operating income to reach $287m (£227.4m) to $297m (£235.3m) and excluding the company’s litigation reserve, adjusted operating income is expected to be $310m (£245.6m) to $320m (£253.6m).

Additionally, it also expects revenue to be down 3% to 4%, tightening the previous expectation of a 2% to 4% decline.

Stephanie Linnartz, Under Armour president and CEO, said: “Despite a mixed retail environment during the holiday season, our third quarter revenue results were in line with our expectations; we were able to deliver better than anticipated profitability and remain on track to achieve our full-year outlook.

“As we close out fiscal 2024 and our strengthened leadership team begins to come up to speed in the quarters ahead – we are working to reset Under Armour toward a path of improved revenue growth and enhanced value creation in the future.”