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Under Armour’s Q1 revenues up, updates FY19 forecast

By Prachi Singh

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Management

Under Armour, Inc. in its financial results statement for the first quarter ended March 31, 2019 said, revenue rose 2 percent or 3 percent currency neutral to 1.2 billion dollars. The company added that gross margin increased 100 basis points to 45.2 percent compared to the prior year, while net income was 22 million dollars or 5 cents earnings per share.

"Our first quarter results demonstrate our unwavering commitment to protecting and growing our premium performance athletic brand through a disciplined go-to-market process that delivers innovative products and experiences to make athletes better," said Under Armour Chairman and CEO Kevin Plank, adding, "As we execute against our long-term plan, Under Armour will emerge from 2019 and our 'Protect This House' chapter as an even stronger brand and company."

Under Armour’s first quarter results

The company added that wholesale revenue increased 5 percent to 818 million dollars, while direct-to-consumer revenue was down 6 percent to 331 million dollars, representing 27 percent of total revenue. North America revenue decreased 3 percent to 843 million dollars and the international business increased 12 percent or 17 percent currency neutral to 328 million dollars, representing 27 percent of total revenue.

Within the international business, revenue was up 3 percent or 9 percent currency neutral in EMEA, up 25 percent or 30 percent currency neutral in Asia-Pacific and up 6 percent or 10 percent currency neutral in Latin America. Apparel revenue increased 1 percent to 775 million dollars, footwear revenue increased 8 percent to 293 million dollars driven by strength in the company’s run category and accessories revenue decreased 11 percent to 82 million dollars driven by planned lower sales of backpacks and bags related to a strategic relaunch of key product.

Under Armour updates fiscal 2019 outlook

The company further said that revenue is expected to be up approximately 3 to 4 percent reflecting relatively flat results for North America and a low double-digit percentage rate increase in the international business. Gross margin is now expected to increase approximately 110 to 130 basis points compared to 2018.

Excluding restructuring charges from the comparable prior period, the company now expects an increase of approximately 70 to 90 basis points compared to the 2018 adjusted gross margin due to ongoing supply chain initiatives and channel mix benefits. This compares to a previously expected range of 60 to 80 basis points in improvement compared to the 2018 adjusted gross margin.

Operating income is now expected to reach 220 million dollars to 230 million dollars versus the previously expected range of 210 million dollars to 230 million dollars. Earnings per share are now expected to be 33 cents to 34 cents versus the previously expected range of 31 cents to 33 cents.

Picture:Under Armour newsroom

Under Armour