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Q1 revenues rise 6 percent at Under Armour

By Prachi Singh

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Business

For the first quarter, Under Armour, Inc. said revenue was up 6 percent or 4 percent currency neutral to 1.2 billion dollars. Operating loss for the quarter was 29 million dollars while adjusted operating income was 16 million dollars. The company reported net loss of 30 million dollars. Excluding the impact of the restructuring plan, adjusted net income was 1 million dollars, while diluted earnings per share were negative 0.07 dollar.

"Our first quarter results demonstrate measured progress against our focus on operational excellence and becoming a better company," said Under Armour Chairman and CEO Kevin Plank in a press release, adding, "We remain confident in our ability to deliver on our full year targets."

Under Armour whole revenues up 1 percent

Revenue to wholesale customers increased 1 percent to 779 million dollars and direct-to-consumer revenue was up 17 percent to 352 million dollars. The direct-to-consumer business represented 30 percent of global revenue in the quarter.

North America revenue was relatively flat and down 1 percent currency neutral, while the international business continued to deliver strong growth with a 27 percent or 19 percent currency neutral increase, representing 24 percent of total revenue. Within the international business, revenue in EMEA was up 23 percent or 13 percent currency neutral, up 35 percent or 28 percent currency neutral in Asia-Pacific and up 21 percent or 14 percent currency neutral in Latin America.

Apparel revenue increased 7 percent to 766 million dollars, driven by strength in men's training. Footwear revenue was up 1 percent to 272 million dollars with strength in running tempered by team sports and global football. Accessories revenue increased 3 percent to 92 million dollars led by men's training.

Gross margin declined 120 basis points to 44.2 percent as benefits from changes in foreign currency rates were more than offset by accelerated inventory management initiatives. Adjusted gross margin, which excludes an 8 million dollars impact related to restructuring efforts, was 44.8 percent, a decrease of 60 basis points compared to the prior year.

Under Armour expects low single-digit rise in FY18 revenue

Under Armour said, there are no changes to the company's full year 2018 outlook provided on February 13, 2018. The company expects net revenue to be up at a low single-digit percentage rate reflecting a mid-single-digit decline in North America and international growth of greater than 25 percent.

Gross margin is expected to increase approximately 50 basis points to 45.5 percent due to benefits from lower planned promotional activity, product costs, channel mix and changes in foreign currency. Operating income is expected to reach 20 million dollars to 30 million dollars. Excluding the impact of continued restructuring efforts, adjusted operating income is expected to be 130 million dollars to 160 million dollars. Excluding the impact of the restructuring efforts, adjusted diluted earnings per share is expected to be in the range of 0.14 dollar to 0.19 dollar.

Picture:Under Armour website

Under Armour