Under Armour stock climbs on Q1 top and bottom-line beat, raised outlook

By James Rogers

Athletic-apparel maker Under Armour raised its outlook for 2025 adjusted earnings

Under Armour Inc.'s stock rose 10.7% premarket Thursday after the athletic-apparel maker beat Wall Street's top and bottom-line expectations in its first-quarter results and raised its earnings outlook.

The Baltimore-based company reported a first-quarter loss of $305 million, or a loss of 70 cents a share, after net income of $10 million, or earnings of 2 cents a share, in the prior year's quarter. On an adjusted basis, Under Armour (UA) earned 1 cent a share. Analysts surveyed by FactSet were looking for a loss of 8 cents a share.

Revenue was $1.184 billion, down from $1.317 billion in the prior year's quarter, but above the FactSet consensus of $1.144 billion. The company's North America revenue decreased 14% year-over-year to $709 million, and international revenue decreased 2% to $473 million. Asia-Pacific revenue was down 10%, EMEA was flat and Latin America was up 16%.

Related: Under Armour's stock buoyed by hopes for restructuring as founder Kevin Plank returns, pledges renewed focus on men

The company's gross margin increased 110 basis points to 47.5%, which Under Armour said was driven primarily by lower levels of discounting in the direct-to-consumer business and lower product costs. This was partially offset by unfavorable foreign currency impacts, channel and regional mix, and headwinds due to the timing of prior year supply chain benefits, Under Armour added, in a statement.

Under Armour, which announced a restructuring plan in May, also updated its fiscal 2025 outlook, and now expects adjusted earnings between 19 cents a share and 22 cents a share, above its prior outlook 18 cents to 21 cents a share. Analysts surveyed by FactSet are looking for earnings of 21 cents a share.

In the statement Under Armour CEO and founder Kevin Plank, who returned to the company earlier this year, said that the athletic-apparel maker has the "strongest product organization" it has had in many years.

Related: Under Armour shake-up shocks Wall Street, with ousted CEO seen as not given time to effect change

Fiscal 2025 revenue is expected to be down at a low double-digit percentage rate, which includes a 14% to 16% decline in North America as the company works to reset its business. Previously, Under Armour had forecast a 15% to 17% decline in North America.

Under Armour shares are down 24.9% in 2024, compared with the S&P 500 index's SPXgain of 9%.

-James Rogers

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08-08-24 0850ET

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