Under Armour Q3 revenue rises to $1.4 billion

Wholesale revenue went up 4 per cent to $914 million and direct-to-consumer revenue was flat at $465 million, representing 32 per cent of total revenue. North America revenue decreased 2 per cent to $1.1 billion (down 1 per cent currency neutral) and the international business increased 15 per cent to $351 million (up 17 per cent currency neutral), representing 24 per cent of total revenue. Within the international business, revenue was up 15 per cent in EMEA (up 16 per cent currency neutral), up 15 per cent in Asia-Pacific (up 16 per cent currency neutral) and up 16 per cent in Latin America (up 23 per cent currency neutral).

During the reported period, gross margin increased 10 basis points to 46.1 per cent compared to the prior year including a $5 million impact related to restructuring efforts. Excluding restructuring efforts in both periods, adjusted gross margin increased 20 basis points to 46.5 per cent compared to the prior year driven predominantly by product cost improvements and lower promotional activity offset by channel mix.

Selling, general & administrative expenses increased 5 per cent to $528 million, or 36.6 per cent of revenue driven by continued investments in the direct-to-consumer, footwear and international businesses.

"Our third quarter results demonstrate that our multi-year transformation is on track," said Under Armour chairman and CEO Kevin Plank. "As we work through this chapter, we are staying sharply focused on our brand by connecting even more deeply with our consumers while delivering industry-leading, innovative products and premium experiences. Coupled with increasingly greater business discipline and resulting efficiencies, we continue to gain confidence in our long-term path and ability to deliver for our consumers, customers and shareholders."

For fiscal 2018, the company expects to incur approximately $200 to $220 million in pre-tax restructuring and related charges in connection with its previously announced restructuring plan. Through the third quarter of 2018, the company has recognised pre-tax costs of $154 million, inclusive of $24 million of pre-tax costs recognised in the third quarter.

Revenue is expected to increase approximately 3 to 4 per cent reflecting a low single-digit decline in North America and international growth of approximately 25 per cent. From a product perspective, apparel is expected to grow at a mid-single-digit rate, footwear at a low single-digit rate, and accessories is now expected to decline at a mid-single-digit rate.

Gross margin is expected be flat to down slightly versus the prior year rate of 45.0 per cent. Adjusted gross margin is expected to improve slightly compared to 2017 as benefits from product costs and lower planned promotional activity are offset primarily by inventory management actions. (RR)

Fibre2Fashion News Desk – India