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Under Armour (NYSE:UAA) reported FQ2 revenue was flat compared to a year ago at $1.6B.
Wholesale revenue decreased 1% to $940M, and direct-to-consumer revenue increased 3% to $596M due to a 2% increase in e-commerce revenue, which represented 35% of the total direct-to-consumer business in the quarter, and a 4% increase owned and operated store revenue. North America revenue decreased 2% to $991M, and international revenue increased 5% to $573M. For the international business, revenue increased 9& in EMEA (up 4% currency neutral) and 3% in Asia-Pacific (up 7% currency neutral). Revenue declined 8% in Latin America (down 19% currency neutral).
Apparel revenue increased 3% during the quarter to $1.1B. Footwear revenue was down 7% to $351M. Accessories revenue increased 3% to $114M.
Gross margin increased 260 basis points to 48.0% of sales, driven primarily by supply chain benefits related to lower freight expenses, partially offset by a channel mix impact related to a normalization of off-price sales.
EPS came in at $0.24 vs. $0.20 consensus and $0.19 a year ago.
Under Armour (UAA) ended the quarter with an inventory position up 6% year-over-year to $1.1B.
CEO update: “Our second quarter results, particularly profitability, exceeded our expectations… Consequently, we are maintaining our fiscal 2024 operating income and EPS outlook even as we lower our revenue expectations primarily in response to challenges in North America during the back half of the year.”
Looking ahead, Under Armour (UAA) expects FY24 revenue to be down 2% to 4% vs the previous expectation of flat to up slightly. EPS is anticipated to land in a range of $0.47 to $0.51 vs. $0.49 consensus. Gross margin is expected to be up 100 to 125 basis points vs. the previous outlook of up 25 to 75 basis points.
Shares of Under Armour (UAA) rose 1.95% in premarket trading to $7.35 vs. the 52-week trading range of $6.29 to $13.05.
