Under Armour narrows Q2 loss but reveals weak outlook
Under Armour, Inc. for its second quarter ended June 30, 2019 posted revenue increase of 1 percent or 3 percent on currency neutral basis to 1.2 billion dollars. The company said, wholesale revenue decreased 1 percent to 707 million dollars and direct-to-consumer revenue was up 2 percent to 423 million dollars, representing 35 percent of total revenue. The company added that net loss was 17 million dollars or 4 cents per share compared with net loss of 95.5 million dollars or 21 cents per share same quarter last year.
"Our second quarter results give us increasing conviction that our transformation continues to make solid progress across our business, unlocking efficiencies that are driving greater precision, consistency and repeatability," said Under Armour Chairman and CEO Kevin Plank in a statement.
Highlights of Under Armour’s second quarter
The company added that North America revenue decreased 3 percent to 816 million dollars and the international business increased 12 percent or 17 percent on currency neutral basis to 339 million dollars representing 28 percent of total revenue. Within the international business, revenue was up 6 percent or 11 percent on currency neutral in EMEA, up 23 percent or 29 percent currency neutral in Asia-Pacific and down 3 percent but up 2 percent currency neutral in Latin America.
Apparel revenue decreased 1 percent to 740 million dollats; footwear revenue increased 5 percent to 284 million dollars; and accessories revenue was unchanged at 106 million dollars.
Gross margin increased 170 basis points to 46.5 percent compared to the prior year, while operating loss was 11 million dollars.
Under Armour expects 3 to 4 percent rise in FY19 revenue
For fiscal 2019, the company said, revenue is expected to be up approximately 3 to 4 percent reflecting a slight decline in North America and a low to mid-teen percentage rate increase in the international business.
Gross margin is expected to increase approximately 110 to 130 basis points compared to 2018. Excluding restructuring charges from the comparable prior period, Under Armour expects an increase of approximately 70 to 90 basis points compared to 2018 adjusted gross margin due to ongoing supply chain initiatives and channel mix benefits.
Operating income is now expected to reach approximately 230 million dollars to 235 million dollars versus the previously expected range of 220 million dollars to 230 million dollars and earnings per share are expected to be 33 cents to 34 cents inclusive of a negative impact from the company's minority interest in its Japanese licensee.
Picture:Under Armour newsroom