Revenue at Under Armour Inc. was up 2 percent or 5 percent currency neutral to 1.6 billion dollars compared to the prior year.
The company has revised its outlook for the year ahead due primarily to a more challenging retail environment and additional negative impacts from changes in foreign currency.
"We're pleased to have delivered second-quarter results that were in line with our expectations," said Under Armour interim president and CEO Colin Browne, adding, "While we anticipate the immediate macroeconomic backdrop to stay uncertain – we are taking a balanced approach to mitigate near-term pressures while continuing to focus on the long-term strength of our brand."
Review of Under Armour’s Q2 results
Wholesale revenue increased 4 percent to 948 million dollars and direct-to-consumer revenue decreased 4 percent to 577 million dollars due to a 9 percent decline in owned and operated store revenue partially offset by a 4 percent increase in ecommerce revenue, which represented 36 percent of the total direct-to-consumer business during the quarter.
The company’s North American revenue was down 2 percent compared to the prior year at 1 billion dollars and international revenue increased 7 percent or 16 percent currency neutral to 547 million dollars. Within the international business, revenue increased 9 percent or 20 percent currency neutral in EMEA, rose 7 percent or 14 percent currency neutral in Asia-Pacific and increased 3 percent or 4 percent currency neutral in Latin America.
Apparel revenue decreased 2 percent to 1 billion dollars, footwear revenue increased 14 percent to 376 million dollars and accessories revenue fell 12 percent to 111 million dollars.
Gross margin declined 560 basis points to 45.4 percent compared to the prior year.
Net income was 87 million dollars, while adjusted net income was 92 million dollars. Diluted earnings per share were 19 cents and adjusted diluted earnings per share were 20 cents.
Under Armour revises outlook
The company said, revenue is expected to grow at a low single-digit percentage rate compared to the previous expectation of 5 to 7 percent growth.
Currency-neutral revenue is expected to be up at a mid-single-digit percentage rate compared to the previous expectation of 7 to 9 percent growth.
Gross margin remains unchanged from the previous outlook of a 375 to 425 basis point decline. Diluted earnings per share are expected to be 56 cents to 60 cents compared to the previous expectation of 61 cents to 67 cents.