Sportswear Company Under Armour Q3: Earnings Beat, 6% Sales Decline, Upbeat Outlook & More

Under Armour Inc UAA, UA shares are trading higher in premarket on Thursday after the third-quarter earnings result.

The sportswear company reported third-quarter sales decline of 6% year-on-year to $1.401 billion, beating the analyst consensus estimate of $1.341 billion.

Wholesale revenue decreased 1% Y/Y to $705 million, and direct-to-consumer revenue dropped 9% to $673 million.

Apparel revenue slipped 5% Y/Y, Footwear dropped 9%, while Accessories revenue increased 6%. North America revenue decreased 8% to $844 million, and international revenue slipped 1% to $558 million.

Gross profit decreased 0.8% to $665.2 million, and the gross margin expanded 240 basis points to 47.5%. The operating income for the quarter plunged 81% to $13.5 million with an operating margin of 1%.

The company's adjusted EPS was 8 cents, beating the consensus estimate of 4 cents.

The company held $726.8 million in cash and equivalents as of December-end. Inventory remained flat at $1.1 billion.

Under Armour repurchased $25 million of its class C common stock in the third quarter, retiring 2.8 million shares.

By the end of the third fiscal quarter of 2025, the company had recognized $42 million in restructuring and impairment charges and $15 million in other related transformational expenses under the recent restructuring plan.

“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," said President and CEO Kevin Plank.

Outlook: Under Armour raised the FY25 adjusted EPS outlook from $0.24 – $0.27 to $0.28 – $0.30 versus the $0.28 estimate.

The company sees a revenue decline of 10%, compared to the prior expectation of a low double-digit percentage decline.

The company also raised adjusted operating income guidance from $165 million – $185 million to $185 million – $195 million.

Capital expenditures are expected to be $170 million – $180 million, compared to the previous estimate of $190 million – $210 million.

Price Action: UAA shares are trading higher by 9.10% at $8.99 in premarket at the last check Thursday.

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