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Under Armour(UA) - 2025 Q2 - Quarterly Results
UAUnder Armour(UA)2024-11-07 12:44

Revenue Performance - Revenue for Q2 fiscal 2025 decreased by 11% to 1.4billion,withNorthAmericadown131.4 billion, with North America down 13% to 863 million and international revenue down 6% to 538million[4]−ForthethreemonthsendedSeptember30,2024,UnderArmourreportednetrevenuesof538 million[4] - For the three months ended September 30, 2024, Under Armour reported net revenues of 1,399,023, a decrease of 10.7% compared to 1,566,674inthesameperiodof2023[14]−UnderArmour′stotalnetrevenuesforthesixmonthsendedSeptember30,2024,were1,566,674 in the same period of 2023[14] - Under Armour's total net revenues for the six months ended September 30, 2024, were 2,582,688, down 10.4% from 2,883,639inthesameperiodlastyear[14]−Thecompany′stotalnetrevenuegrowthforthesixmonthsendedSeptember30,2024,wasadeclineof10.42,883,639 in the same period last year[14] - The company's total net revenue growth for the six months ended September 30, 2024, was a decline of 10.4% on a GAAP basis, with currency-neutral net revenue growth also declining by 10.1%[21] Profitability Metrics - Net income for the quarter was 170 million, while adjusted net income was 131million[4]−UnderArmour′snetincomeforthethreemonthsendedSeptember30,2024,was131 million[4] - Under Armour's net income for the three months ended September 30, 2024, was 170,382, or 0.39perdilutedshare,comparedtoanetincomeof0.39 per diluted share, compared to a net income of 104,711, or 0.23perdilutedshare,intheprioryear[13]−ForthesixmonthsendedSeptember30,2024,UnderArmourreportedanetlossof0.23 per diluted share, in the prior year[13] - For the six months ended September 30, 2024, Under Armour reported a net loss of 135,044, compared to a net income of 114,721forthesameperiodin2023[19]−AdjustednetincomeforthesixmonthsendedSeptember30,2024,was114,721 for the same period in 2023[19] - Adjusted net income for the six months ended September 30, 2024, was 134,770, compared to a loss of 135,044onaGAAPbasis[25]CostManagement−Grossmarginincreasedby200basispointsto49.8135,044 on a GAAP basis[25] Cost Management - Gross margin increased by 200 basis points to 49.8%, driven by lower product and freight costs and reduced discounting levels[4] - Selling, general, and administrative expenses decreased by 15% to 520 million, with adjusted expenses down 13% to 530million[4]−GrossprofitforthethreemonthsendedSeptember30,2024,was530 million[4] - Gross profit for the three months ended September 30, 2024, was 696,132, representing a gross margin of 49.8%, up from 47.8% in the prior year[13] - The company incurred selling, general, and administrative expenses of 519,840,whichaccountedfor37.2519,840, which accounted for 37.2% of net revenues, compared to 38.9% in the same period last year[13] Future Outlook - The company expects a low double-digit percentage decline in revenue for fiscal 2025, including a 14-16% decline in North America[7] - Gross margin is projected to increase by 125 to 150 basis points, up from a previous expectation of 75 to 100 basis points[7] - Operating loss is anticipated to be between 176 million and 196million,animprovementfrompriorexpectationsof196 million, an improvement from prior expectations of 220 million to 240million[7]−UnderArmour′soutlookfortheyearendingMarch31,2025,includesanestimatedadjustedincomefromoperationsrangingfrom240 million[7] - Under Armour's outlook for the year ending March 31, 2025, includes an estimated adjusted income from operations ranging from 165 million to 185million[28]RestructuringEfforts−Therestructuringplan′stotalchargesareexpectedtorangefrom185 million[28] Restructuring Efforts - The restructuring plan's total charges are expected to range from 140 million to 160million,with160 million, with 28 million recognized in restructuring and impairment charges to date[6] - The company plans to incur restructuring charges under its 2025 restructuring plan, estimated between 140millionand140 million and 160 million[29] - The estimated impact of charges under the 2025 restructuring plan is 33millionforthequarterendingDecember31,2024[31]−Thecompanycontinuestofocusonrestructuringeffortstoimproveoperationalefficiencyandfinancialperformance[31]AssetandLiabilityManagement−AsofSeptember30,2024,UnderArmour′stotalassetsdecreasedto33 million for the quarter ending December 31, 2024[31] - The company continues to focus on restructuring efforts to improve operational efficiency and financial performance[31] Asset and Liability Management - As of September 30, 2024, Under Armour's total assets decreased to 4,494,593, down from 4,760,734asofMarch31,2024,representingadeclineofapproximately5.64,760,734 as of March 31, 2024, representing a decline of approximately 5.6%[18] - Under Armour's total liabilities decreased to 2,509,392 as of September 30, 2024, from 2,607,448asofMarch31,2024,adecreaseofapproximately3.82,607,448 as of March 31, 2024, a decrease of approximately 3.8%[18] - Under Armour's cash and cash equivalents decreased to 530,701 as of September 30, 2024, from 858,691asofMarch31,2024,adecreaseofapproximately38858,691 as of March 31, 2024, a decrease of approximately 38%[18] - The company experienced a significant increase in inventories, which rose to 1,105,884 as of September 30, 2024, compared to 958,495asofMarch31,2024,anincreaseofabout15.4958,495 as of March 31, 2024, an increase of about 15.4%[18] Shareholder Metrics - Diluted earnings per share was 0.39, with adjusted diluted earnings per share at 0.30[5]−ForthethreemonthsendedSeptember30,2024,theGAAPdilutednetincomepersharewas0.30[5] - For the three months ended September 30, 2024, the GAAP diluted net income per share was 0.39, while the adjusted diluted net income per share was 0.30[26]−TheGAAPdilutednetincomepershareisprojectedtobebetween0.30[26] - The GAAP diluted net income per share is projected to be between (0.07) and (0.05)forthequarterendingDecember31,2024[32]−Theadjusteddilutednetincomepershareisprojectedtobebetween(0.05) for the quarter ending December 31, 2024[32] - The adjusted diluted net income per share is projected to be between 0.02 and 0.04forthesamequarter[32]OperationalMetrics−NorthAmericasegmentrevenuesdecreasedby12.90.04 for the same quarter[32] Operational Metrics - North America segment revenues decreased by 12.9% to 863,345 for the three months ended September 30, 2024, from 991,357in2023[14]−TheEMEAregionsawaslightdeclineof1.4991,357 in 2023[14] - The EMEA region saw a slight decline of 1.4% in revenues, totaling 283,178 for the three months ended September 30, 2024, compared to 287,091inthesameperiodlastyear[14]−Direct−to−consumersalesdecreasedby7.6287,091 in the same period last year[14] - Direct-to-consumer sales decreased by 7.6% to 550,336 for the three months ended September 30, 2024, from 595,811intheprioryear[15]−Apparelsalesdecreasedby11.5595,811 in the prior year[15] - Apparel sales decreased by 11.5% to 947,188 for the three months ended September 30, 2024, compared to $1,070,401 in the same period of 2023[16] Store Operations - As of September 30, 2024, Under Armour operates 196 total doors in North America, a slight decrease from 197 doors in 2023[33] - The total international doors decreased from 253 in 2023 to 250 in 2024[33] - The total number of doors operated by Under Armour is 446, down from 450 in the previous year[33] - The company has seen a decrease in the number of Brand House locations in North America from 19 in 2023 to 16 in 2024[33]