For the reported period, revenue from wholesale customers increased 9 per cent to $710 million and direct-to-consumer revenue climbed 7 per cent to $414 million. The direct-to-consumer business represented 35 per cent of global revenue in the quarter.
The selling, general and administrative expenses elevated 10 per cent to $553 million, or 47.0 per cent of revenue driven by continued investments in our direct-to-consumer, footwear, and international businesses, along with a reserve related to a commercial dispute.
"Through the first half of 2018, we are making progress toward our transformation of running a more operationally excellent company while amplifying the power of the Under Armour brand," said Under Armour chairman and CEO Kevin Plank. "The ongoing improvements in our structure, systems and go-to-market process across our global business better position us to drive a more consistent, predictable path to deliver for our consumers, customers and shareholders over the long-term."
On February 13, the company announced a 2018 restructuring plan, which detailed expectations to incur total estimated pre-tax restructuring and related charges of approximately $110 million to $130 million. After further review, the company has identified approximately $80 million of additional restructuring initiatives and now expects to incur approximately $190 million to $210 million of pre-tax restructuring and related charges in 2018.
For fiscal 2018, net revenue is expected to increase approximately 3 per cent to 4 per cent reflecting a low to mid-single-digit decline in North America and international growth of greater than 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 expected to decline at a low-single digit rate.
Gross margin is likely to be flat to down slightly versus the prior year rate of 45.0 per cent. Adjusted gross margin is projected to improve slightly compared to 2017 as benefits from product costs and lower planned promotional activity are offset by increased inventory management actions.
"As we work through our multi-year transformation, we continue to proactively attack underperforming areas of our business including our SG&A cost structure and inventory. All of this will help create a better and stronger Under Armour through even greater operational efficiencies. We are unwavering in building our global brand and confident we're on the right track." Plank concluded. (RR)
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