Revenue Dips 1% in Q2, Gross Profit Rises
- Under Armour lowers full-year revenue forecast due to Q2 sales stagnation
- Revenue drops 1% in Q2 to $1.6bn (£1.3bn)
- Wholesale revenues down 1% to $940m (£765m)
- Gross profit up 5% to $752m (£612m) and gross margin increased by 260 basis points
- Direct-to-consumer revenue up 3% to $596m (£485m)
- E-commerce revenue accounts for 35% of total direct-to-consumer business
- North America revenues down 2% to $991m (£806m)
- International EMEA revenues up 9% to $287m (£233m) and Asia-Pacific up 3% to $232m
- Latin America revenue down 8% to $53.7m (£43.7m)
- Apparel and accessories revenues increase 3% to $1.1bn (£814m) and footwear revenue down 7% to $351m (£285.4m)
- CEO Stephanie Linnartz maintains fiscal 2024 operating income and EPS outlook
- Investing in long-term growth while focusing on profitability
Under Armour has adjusted its full-year revenue forecast due to stagnating sales in the second quarter. Revenues dropped by 1% to $1.6 billion (£1.3 billion) during this period. Wholesale revenues also fell by 1% to $940 million (£765 million. The company now expects a decline of 2-4% in full-year revenue, previously forecasting ‘flat to up slightly’. However, gross profit increased by 5% to $752 million (£612 million) and raised the gross margin by 260 basis points. Direct-to-consumer revenue rose 3% to $596 million (£485 million), driven by a 2% increase in e-commerce revenue, which accounted for 35% of the total direct-to-consumer business in the quarter and a 4% rise in owned and operated store revenue. North American revenues fell 2% to $991 million (£806 million), while international EMEA revenues increased by 9% to $287 million (£233 million) and Asia-Pacific revenues rose 3% to $232 million. Latin American revenue dropped 8% to $53.7 million (£43.7 million). In terms of product categories, apparel and accessories revenues increased by 3% to $1.1 billion (£814 million) and footwear revenue declined 7% to $351 million (£285.4 million). CEO Stephanie Linnartz stated that the Q2 results surpassed expectations, allowing them to maintain their fiscal 2024 operating income and EPS outlook despite lowering revenue projections, particularly in North America for the second half of the year. The company plans to balance profitability with long-term growth investments.
Factuality Level: 8
Factuality Justification: The article provides accurate information about Under Armour’s financial performance, including revenue changes in different regions and categories, as well as the company’s outlook for the future. It also includes a quote from the CEO that supports the reported information.
Noise Level: 3
Noise Justification: The article provides relevant information about Under Armour’s financial performance, including revenue changes and some specific details on different regions and product categories. It also includes a statement from the CEO. However, it lacks in-depth analysis or exploration of potential causes for the stagnation or future implications.
Financial Relevance: Yes
Financial Markets Impacted: Under Armour’s stock price may be impacted by the lowered revenue forecast and changes in gross profit.
Financial Rating Justification: The article discusses Under Armour’s financial performance, including changes in revenue and gross profit, which directly pertains to financial topics. It also mentions the potential impact on the company’s stock price due to these changes.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.
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