Global activewear brands report mixed results in FY24

Weak: No Growth In Sales & Profits

Under Armour, Inc (NYSE: UA, UAA)

Baltimore-headquartered Under Armour, Inc is an inventor, marketer and distributor of branded athletic performance apparel, footwear and accessories, which announced its unaudited financial results for Q4 and FY24 ended March 31, 2024.

In the quarter, revenue was down 5 per cent, even in constant currency terms, to $1.3 billion. This includes a 10 per cent fall in revenue from North America and a 7 per cent rise in international revenue driven by EMEA (+10 per cent), Asia-Pacific (+1 per cent), and Latin America (+20 per cent) compared to the same quarter last year. Apparel revenue was down 1 per cent to $877 million, footwear revenue was down 11 per cent to $338 million, and accessories revenue was down 7 per cent. Net income was $7 million, and adjusted net income was $49 million.

Sharing its full fiscal performance, the NYSE-listed company reported a revenue shortfall of 3 per cent to $5.7 billion (4 per cent down in constant currency) compared to $5.9 billion in FY23, with North America revenue decreasing 8 per cent to $3.5 billion and international revenue increasing 8 per cent to $2.2 billion. Wholesale revenue decreased 7 per cent to $3.2 billion, while DTC revenue increased 3 per cent to $2.3 billion. Category-wise, the respective declines were 2 per cent, 5 per cent, and 1 per cent in apparel, footwear, and accessories. Net income was $232 million against last year’s $374 million, while adjusted net income was $245 million.

The company’s FY25 outlook expects revenue to be down at a low double-digit percentage rate, inclusive of a 15 to 17 per cent decline in North America as the company works to meaningfully reset this business following years of heightened promotional activities, particularly in its direct to consumer (DTC) business. In the international business, a low single-digit per cent decline is expected due to more conservative macro consumer trends and actions to protect the brand strength it has built. Gross margin is expected to be up 75–100 basis points from FY24, driven by a material reduction in promotional and discounting activities in the DTC business as well as product costing benefits. With operating income expected to be in the range of $50–$70 million and adjusted operating income to be $130–$150 million, diluted EPS will be in the range of $0.02 to $0.05 ($0.18 to $0.21 adjusted diluted EPS).

Strong: Growth In Both Sales & Profits

Goldwin Inc (TYO: 8111)

Consolidated financial results for the fiscal ended March 31, 2024, of Japan’s Goldwin Inc proved to be a strong performance. Listed on the Tokyo Exchange, the sports and activewear company posted record net sales for the second consecutive year, reaching ¥126,907 million (~$809 million) and growing 10.3 per cent over the previous fiscal’s ¥115,052 million (~$733.24 million). Furthermore, the operating profit grew 8.9 per cent, ordinary profit grew 16.1 per cent, and profit attributable to owners of the parent grew 15.7 per cent year-over-year. Cash flows from operating activities reduced from ¥20,222 million in FY23 to ¥18,551 million in FY24, while the cash and cash equivalents at the end of the reported year increased to ¥42,011 million from ¥34,207 million as of March 31, 2023.

The company’s FY25 forecast includes net sales of ¥52,800 million (~$336.50 million) for the first six-month period ending September 30, 2024—a year-over-year growth of 3.3 per cent. For the full fiscal ending March 31, 2025, the net sales are pegged at ¥133,200 million (~$849 million), reflecting a growth of 5 per cent. However, profitability at all levels is estimated to reflect de-growth—operating profit is expected to decline 24.1 per cent, ordinary profit to reduce 20.6 per cent, and profit attributable to owners of the parent to decrease 13.5 per cent.

Fibre2Fashion News Desk (WE - SB)