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Under Armour announces third quarter results

Feb 15, 2023 United States
Under Armour announces third quarter results
The Baltimore-based company reported revenue growth of 3% in the third quarter of fiscal 2023, reaching 1.6 billion US dollars, as compared to the same period of the prior fiscal year
We are pleased to have delivered solid third-quarter results and remain on track to achieve our full-year operational and financial goals”, commented the Under Armour Interim President and CEO Colin Browne. “Moving forward, I'm excited to partner with Stephanie Linnartz to advance our strategic consumer and product refinements further – leveraging Under Armour's strong brand to drive sustainable, profitable growth”, he added.


Third Quarter Results

(Under Armour began its new fiscal year 2023 on the 1st of April 2022, so the comparable baseline period is the 1st of April 2021 through the 31st of March 2022)

In the third quarter of the current financial year, the company's revenue increased by 3% (by 7% currency neutral), reaching 1.6 billion US dollars, as compared to the same period of fiscal 2022.

Under Armour's wholesale revenue rose by 7% in this period, totalling 820 million US dollars, and its direct-to-consumer revenue declined by 1%, amounting to 715 million US dollars, on a comparable basis to the same period of the previous year. The company noted that the decline of 6% in owned and operated store revenue was partially offset by the 7% increase in the e-commerce revenue, which accounted for 45% of the total direct-to-consumer business during the quarter.

By region, the company's revenue was down by 2% in North America, adding 1 billion US dollars to the total revenue, while international revenue grew by 14%, reaching 527 million US dollars (up by 24% currency neutral), as compared to a similar period of the prior fiscal year. Within the international business, revenue was up by 23% in the EMEA region (by 46% currency neutral) and 45% in the Latin America region (by 41% currency neutral), but declined by 9% in the Asia-Pacific region (up by 1% currency neutral), year-over-year.

Furthermore, in the third quarter of fiscal 2023, Under Armour's footwear revenue rose by 25%, amounting to 354 million US dollars, while apparel revenue decreased by 2% to 1 billion US dollars and apparel revenue was down by 2%, totalling 105 million US dollars.

The US-based company's gross margin contracted by 650 basis points to 44.2% in this third quarter, as compared to the same period of fiscal 2022, “driven primarily by higher promotions, mix impacts related to higher distributor and footwear revenue, and the adverse effects of changes in foreign currency”.

Under Armour's third quarter net income totalled 122 million US dollars, or diluted earnings per share of 0.27 US dollars, and adjusted net income was 76 million US dollars, or adjusted diluted earnings per share of 0.16 US dollars.

Full Year Outlook

The Baltimore-based group reported that the revenue growth outlook remains unchanged from the previous expectation of a low single-digit percentage rate increase on a reported basis, and up to a mid-single-digit percentage rate on a currency-neutral basis.

But is now anticipating diluted earnings per share between 0.71 US dollars to 0.75 US dollars, as compared to the previous guidance of between 0.56 US dollars to 0.60 US dollars, and adjusted diluted earnings per share of 0.52 US dollars to 0.56 US dollars, versus the previously expected range of 0.44 US dollars to 0.48 US dollars.


Image Credits: about.underarmour.com

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