In This Article:
-
Revenue: Declined 6% to $1.4 billion, better than the expected 10% decline.
-
North America Revenue: Decreased 8%, mainly due to a decline in DTC business.
-
EMEA Revenue: Increased 5% (3% currency-neutral), with growth in DTC and full-price wholesale.
-
APAC Revenue: Fell 5% (6% currency-neutral) due to a competitive and promotional landscape.
-
Latin America Revenue: Declined 16% (9% currency-neutral), mainly due to lower distributor sales.
-
Gross Margin: Increased 240 basis points to 47.5%, driven by supply chain benefits and reduced discounting.
-
SG&A Expenses: Rose 6% to $638 million, with adjusted SG&A at $606 million, up 5%.
-
Operating Income: $14 million; adjusted operating income was $60 million.
-
Adjusted Diluted EPS: $0.08 for the quarter.
-
Inventory: Flat at $1.1 billion compared to last year.
-
Cash Balance: $727 million at the end of the third quarter.
-
Stock Repurchase: $25 million of Class C stock, retiring 2.8 million shares.
-
Fiscal '25 Outlook: Revenue expected to decline approximately 10%; adjusted diluted EPS expected to be $0.28 to $0.30.
Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Under Armour Inc (NYSE:UAA) exceeded expectations for the third quarter, with revenue and gross margin surpassing forecasts.
-
The company raised its full-year outlook, indicating confidence in its strategic repositioning efforts.
-
Significant progress was made in enhancing product offerings, particularly in athletic performance and sportswear.
-
The launch of new products, such as the Curry brand's Fox 1 shoe and the SlipSpeed Echo footwear, has generated positive buzz.
-
Under Armour Inc (NYSE:UAA) is seeing growth in its loyalty program, with 4 million new members added in North America, demonstrating higher repurchase rates and revenue per consumer.
Negative Points
-
North America experienced an 8% revenue decline, primarily due to decreased direct-to-consumer business and lower eCommerce sales.
-
APAC revenue fell by 5%, with challenges arising from a competitive market and increased discounting.
-
Latin America saw a 16% revenue decline, mainly due to lower distributor sales.
-
The company is facing headwinds in the fourth quarter, including a softer order book and pressures in the APAC region.
-
SG&A expenses rose by 6%, driven by higher marketing expenses and incentive compensation, partially offset by cost management efforts.
Q & A Highlights
Q: Kevin, as you enter this new chapter of exciting marketing and product, could you elaborate on balancing storytelling while achieving more by doing less? Also, any insights on the percentage of eCommerce still on discounts and the timeline for the D2C reset? A: Kevin Plank, CEO: Achieving more by doing less is a broader metric at Under Armour, focusing on growth by constraint. This involves empowering teams and creating greater accountability. We're being more intentional with our brand and product offerings, like the new SlipSpeed Echo. David Bergman, CFO: We've made significant progress in reducing eCommerce discounts, especially in North America, but there's still work to do. We're also focusing on EMEA and APAC to further reduce discounts.