Under Armour, a renowned American sportswear company, has reported a 10 per cent year-on-year (YoY) drop in revenue for the first quarter of fiscal 2025 (Q1 FY25), reaching $1.2 billion, reflecting a similar 10 per cent decline on a currency-neutral basis.

In North America, revenue decreased by 14 per cent to $709 million. The international market also faced challenges, with a 2 per cent revenue decline to $473 million, both reported and currency-neutral. Within the international business, revenue in Europe, the Middle East and Africa (EMEA) remained flat, while the Asia-Pacific region experienced a 10 per cent decrease (7 per cent currency-neutral). However, Latin America saw a growth of 16 per cent in revenue (12 per cent currency-neutral).

Wholesale revenue fell by 8 per cent to $681 million, and direct-to-consumer revenue decreased by 12 per cent to $480 million. The revenue from owned and operated stores declined by 3 per cent. Due to planned decreases in promotional activities, e-commerce revenue dropped by 25 per cent, representing 34 per cent of the total direct-to-consumer business for the quarter, the company said in a press release.

Product-wise, apparel revenue decreased by 8 per cent to $758 million, footwear revenue declined by 15 per cent to $310 million, and accessories revenue fell by 5 per cent to $93 million.

Despite these declines, Under Armour’s gross margin increased by 110 basis points to 47.5 per cent. However, due to a litigation reserve, selling, general, and administrative expenses rose by 42 per cent to $837 million. When adjusted, these expenses were down 6 per cent to $555 million.

The company reported an operating loss of $300 million. Excluding transformation expenses and other charges totalling $308 million, the adjusted operating income was $8 million. The net loss for the quarter was $305 million, while adjusted net income was $4 million. The diluted loss per share was $0.70, with adjusted diluted earnings per share at $0.01. Inventory levels showed improvement, decreasing by 15 per cent to $1.1 billion.

"We are encouraged by early progress in our efforts to reconstitute a premium positioning for the Under Armour brand and pleased with our first quarter fiscal 2025 results that were ahead of expectations," said Under Armour president and CEO Kevin Plank. "Our renewed energy and alignment are proving to be critical enablers as we work to deliver superior products and storytelling while driving efficiencies, reducing promotional activity, and complexity."

Fibre2Fashion News Desk (DP)