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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.
Revenue by Segment
Revenue by Geographic Location
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.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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