The gross margin of the company increased 240 basis points (bps) to 47.5 per cent, driven primarily by less direct-to-consumer (DTC) discounting, lower product and freight costs, and favourable impacts from changes in foreign currency.
Under Armour has reported a revenue of $1.4 billion in Q3 FY25, down 6 per cent YoY.
The gross margin of the company rose 240 bps to 47.5 per cent, while SG&A expenses increased 6 per cent to $638 million.
Net income was $1 million with EPS of $0.00.
For 9M FY25, revenue fell 9 per cent to $3.98 billion, with a $113 million operating loss.
The adjusted net income was $35 million.
The cost of goods sold in Q3 FY25 decreased to $735.88 million (52.5 per cent of net revenues) from $815.40 million (54.9 per cent) in Q3 FY24, resulting in a gross profit of $665.16 million, compared to $670.64 million in the same quarter of prior fiscal, Under Armour said in a press release.
Distribution-wise, the wholesale revenue decreased by 1 per cent to $705 million, and direct-to-consumer (DTC) revenue was down 9 per cent to $673 million. Revenue from owned and operated stores declined 1 per cent, while e-commerce revenue was down 20 per cent due to ongoing planned decreases in promotional activities, representing 39 per cent of the total DTC business for the quarter.
Segment-wise, the apparel revenue decreased 5 per cent to $966 million, footwear revenue was down 9 per cent to $301 million, and accessories revenue was up 6 per cent to $110 million.
Region-wise, North America’s revenue decreased by 8 per cent to $844 million, and international revenue decreased by 1 per cent to $558 million (down 2 per cent currency neutral). In the international business, revenue in Europe, Middle East, and Africa (EMEA) was up 5 per cent (up 3 per cent currency neutral), down 5 per cent in Asia-Pacific (down 6 per cent currency neutral), and down 16 per cent in Latin America (down 9 per cent currency neutral).
Selling, general, and administrative (SG&A) expenses increased 6 per cent to $638 million, primarily due to increased marketing investments. Adjusted SG&A expenses increased 5 per cent to $606 million. Meanwhile, the income from operations declined to $13.51 million (1.0 per cent) from $71.41 million (4.8 per cent).
The operating income of the company was $14 million. Excluding the impairment charge, transformation expenses, and restructuring charges, adjusted operating income was $60 million. The net income of the company was $1 million, and adjusted net income was $35 million. The diluted earnings per share (EPS) was $0.00 and adjusted diluted EPS was $0.08.
“We are pleased our quarterly results exceeded expectations. As we sharpen our focus on strengthening the Under Armour brand, our updated product strategy and enhanced marketplace discipline combined with the shift to a category-led operating model are driving our transformation,” said Kevin Plank, president and chief-executive officer (CEO) of Under Armour.
“Additionally, we will enter a pivotal new chapter in our marketing strategy by launching a dynamic, multi-year initiative of storytelling that showcases our incredible products, talented athletes, and influential creators. This will greatly enhance our visibility and empower our authentic connection with athletes to elevate our brand like never before,” added Plank.
Nine months (9M) financial
For the nine-month period, the company’s net revenues totalled $3.98 billion, a decline from $4.37 billion in the 9M period of the prior fiscal. The cost of goods sold decreased to $2.06 billion (51.7 per cent of net revenues) from $2.34 billion (53.5 per cent), leading to a gross profit of $1.92 billion (48.3 per cent), compared to $2.03 billion (46.5 per cent) in 9M FY24.
Meanwhile, SG&A expenses rose to $1.99 billion (50.1 per cent) from $1.80 billion (41.1 per cent). The loss from operations was $113.14 million (-2.8 per cent), compared to an income of $233.31 million (5.3 per cent) in 2023. Interest expense, net, stood at $2,794,000, slightly higher than $2,210,000 in the prior year. Other income (expense), net, was $8,713,000, a decline from $35,763,000 in 9M FY24.
The basic and diluted net loss per share was $0.31, compared to net income per share of $0.51 (basic) and $0.50 (diluted) in 9M FY24. The weighted average common shares outstanding were 433,212,000 (basic and diluted) in 2024, compared to 441,893,000 (basic) and 452,208,000 (diluted) in the prior year.
Fibre2Fashion News Desk (SG)
