American sportswear company Under Armour has disclosed that its fiscal third quarter (Q3) results for the fiscal year 2025 (FY25) outperformed expectations with a 6% revenue decline to $1.4bn – an improvement over its previous projection of a 10% drop.
The company’s North American segment experienced an 8% decrease in revenue, settling at $844m, while international revenue slightly fell by 1% to $558m, which represents a 2% drop when adjusted for currency fluctuations.
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Regionally within its international business, Under Armour saw mixed results. The Europe, Middle East and Africa (EMEA) region posted a 5% increase in revenue, while the Asia-Pacific and Latin America regions faced downturns of 5% and 16% respectively.
Wholesale revenue edged down 1%, reaching $705m in Q3 FY25, and the direct-to-consumer sector saw a 9% decrease to $673m.
This sector’s owned and operated store revenue dipped by 1%, and e-commerce suffered a significant 20% drop. The latter was attributed to deliberate reductions in promotional activities and constituted 39% of the quarter’s total direct-to-consumer revenue.
Apparel sales decreased by 5% to $966m over the quarter and the footwear segment saw a 9% drop to $301m. Accessories sales surged 6%, increasing to $110m.
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By GlobalDataDuring the quarter ended 31 December 2024, Under Armour’s net income stood at $1.23m compared to the substantial $110.75m recorded in the same quarter of the previous year.
Its diluted earnings per share stagnated at $0 in Q3 FY25 – a stark contrast to the $0.25 reported in Q3 FY24.
The company generated operating income of $13.50m over the quarter against $71.40m in the same quarter of the previous year.
The gross profit of Under Armour was slightly down at $665.15m, compared to the previous year’s $670.63m.
But gross margin saw improvement, rising by 240 basis points to 47.5%. This increase was primarily attributed to reduced discounting in direct-to-consumer channels, diminished product and freight costs, and favourable currency exchange impacts.
Under Armour president and CEO Kevin Plank stated: “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.”
In light of these third-quarter results, Under Armour has revised its full-year outlook.
The company now anticipates revenues to fall by 10%, an adjustment from its earlier forecast of a low double-digit percentage decline.
Full-year gross margin is projected to rise by around 160 basis points versus the previously estimated range of 125 to 150 basis points.
The expected operating loss is set between $179m and $189m, from the former range of $176m to $196m.
Finally, diluted loss per share is forecasted between $0.48 and $0.50, slightly improving upon the earlier projection of $0.48 to $0.51 per share.
