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Jun 30, 2024
Under Armour Q1 2025 Earnings Report
Under Armour's Q1 2025 results exceeded expectations, with progress in brand positioning and alignment, despite a revenue decrease.
Key Takeaways
Under Armour reported a 10% decrease in revenue to $1.2 billion for Q1 2025, but results were ahead of expectations. The company saw improvements in gross margin due to reduced discounting and lower product costs. A net loss of $305 million was reported, influenced by a litigation reserve, while adjusted net income was $4 million.
Revenue decreased by 10% to $1.2 billion, with North America down 14% and international down 2%.
Gross margin increased by 110 basis points to 47.5% due to lower discounting and product costs.
Net loss was $305 million, or $0.70 per share, while adjusted net income was $4 million, or $0.01 per share.
The company repurchased $40 million of Class C common stock, with $460 million remaining under the share repurchase authorization.
Under Armour
Under Armour
Under Armour Revenue by Segment
Under Armour Revenue by Geographic Location
Revenue by Segment
Apparel Revenue
CapyFin.comFootwear Revenue
CapyFin.comAccessories Revenue
CapyFin.comLicensing Revenue
CapyFin.comCorporate Other Revenue
CapyFin.comRevenue by Geographic Location
North America Revenue
CapyFin.comEMEA Revenue
CapyFin.comAsia-Pacific Revenue
CapyFin.comLatin America Revenue
CapyFin.com Forward Guidance
Under Armour provided its fiscal year 2025 outlook, anticipating a low double-digit percentage decrease in revenue. Gross margin is expected to increase by 75 to 100 basis points. Operating loss is projected to be $194 to $214 million, with an adjusted operating income of $140 to $160 million. Diluted loss per share is expected to be between $0.53 and $0.56, while adjusted diluted earnings per share are expected to be between $0.19 and $0.22. Capital expenditures are estimated to be $200 to $220 million.
Positive Outlook
- Gross margin is expected to be up 75 to 100 basis points compared to the prior year, driven by a material reduction in promotional and discounting activities in the company’s direct-to-consumer business and product costing benefits.
- Adjusted operating income is expected to be $140 to $160 million versus the previous expectation of $130 to $150 million.
- Adjusted diluted earnings per share are expected to be between $0.19 and $0.22.
- Revenue decline in North America is expected to be 14 to 16 percent, an improvement from the previously expected 15 to 17 percent decline.
- Capital expenditures are expected to be between $200 to $220 million.
Challenges Ahead
- Revenue is expected to be down at a low double-digit percentage rate.
- North America revenue is expected to decline by 14 to 16 percent.
- International business is expected to see a low-single-digit percent decline.
- EMEA is expected to be flat, offset by a high-single digit decline in Asia-Pacific due to developing macroeconomic pressures.
- Selling, general and administrative expenses are expected to be up at a mid-to-high-single digit percent rate due to litigation expenses.
Revenue & Expenses
Visualization of income flow from segment revenue to net income