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Revenue of US sportswear firm Under Armour at $1.5 bn in Q3 FY24

08 Feb '24

2 min read

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Under Armour's Q3 FY24 revenue fell 6 per cent to $1.5 billion, with wholesale down 13 per cent but direct-to-consumer up 4 per cent.
North America saw a 12 per cent decline, while international revenue grew 7 per cent.
Apparel and footwear sales dropped.
Gross margin improved to 45.2 per cent.
Net income hit $114 million, with inventory down 9 per cent.

Under Armour, a US-based global sportswear giant, has reported a decrease in revenue by 6 per cent to $1.5 billion in the third quarter of fiscal 2024 (Q3 FY24), reflecting a 7 per cent decrease on a currency-neutral basis. This downturn was largely driven by a significant 13 per cent drop in wholesale revenue, which came in at $712 million, although this was partially offset by a 4 per cent increase in direct-to-consumer sales, totalling $741 million.

In a detailed geographical breakdown, North America, Under Armour's largest market, experienced a 12 per cent decline in revenue, bringing in $915 million. However, the international segment showed resilience with a 7 per cent increase to $566 million, or 4 per cent on a currency-neutral basis. This growth was consistent across the Europe, Middle East, and Africa (EMEA), Asia-Pacific, and Latin America regions.

Product-wise, apparel revenue saw a 6 per cent decrease to $1 billion, and footwear also declined by 7 per cent to $331 million. Accessories revenue, however, remained stable at $105 million, indicating steadiness in this category. Notably, the company's gross margin improved by 100 basis points to 45.2 per cent, Under Armour said in a press release.

Operating expenses held steady year over year at $602 million, inclusive of a $23 million litigation reserve expense. However, adjusted selling, general, and administrative expenses saw a 4 per cent reduction to $579 million, reflecting the company's efforts to optimise its cost structure. Operating income stood at $70 million, with adjusted operating income reaching $92 million.

Net income for the quarter was reported at $114 million. Diluted earnings per share were $0.26, with adjusted diluted earnings per share at $0.19. Inventory levels also saw a positive shift, decreasing by 9 per cent to $1.1 billion.

"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," said Under Armour president and CEO Stephanie Linnartz. "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."

Fibre2Fashion News Desk (DP)

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