Sportswear Company Under Armour Slashes FY24 Topline Outlook: Here's Why

Under Armour Inc UAA UA reported that second-quarter FY24 sales remained flat year-on-year to $1.567 billion, marginally missing the analyst consensus estimate of $1.568 billion.

Wholesale revenue decreased 1% Y/Y to $940 million, and direct-to-consumer revenue increased 3% to $596 million.

Apparel revenue climbed 3% Y/Y, Footwear dropped 7%, while Accessories revenue increased 3%. North America revenue decreased 2% to $991 million, and international revenue increased 5% to $573 million.

Gross profit increased 5.3% Y/Y to $751.9 million, and the gross margin expanded 260 basis points Y/Y to 48%.

Operating margin expanded 170 basis points to 9.3%, and operating income for the quarter increased 22.1% to $145.7 million.

The company held $673.62 million in cash and equivalents as of September 30, 2023. Inventory was $1.1 billion, a 6% increase.

The company's EPS was $0.24, beating the consensus estimate of $0.21.

Outlook: Under Armour sees FY24 revenue to be down 2% - 4% (previously flat - up slightly). The company's FY24 EPS outlook is unchanged at $0.47 - $0.51 versus an estimate of $0.50.

Gross margin is expected to be up 100 to 125 basis points versus the previous expectation of up 25 to 75 basis points. Operating income forecast remains unchanged from the previous expectation of $310 million-$330 million.

Under Armour sees FY24 capital expenditure of $230 million-$250 million (previously $250 million-$270 million).

Price Action: UAA shares are trading higher by 3.33% at $7.45 on the last check Wednesday.