$Under Armour-A (UAA.US)$ shares surged on Thursday after the company reported better-than-expected second-quarter results.
The company reported a 10.7% year-over-year decline in net revenue to $1.399 billion, surpassing the $1.38 billion analyst consensus. Adjusted EPS was $0.30, above the consensus of $0.20.
Wholesale revenue decreased 12% year over year to $826 million, and direct-to-consumer revenue was down 8% to $550 million.
Apparel revenue slipped 12% year over year, Footwear revenue dropped 11%, and Accessories revenue rose 2%. North American revenue decreased 13% to $863 million, and international revenue declined 6% to $538 million.
Gross profit decreased 7% to $696.13 million, and the gross margin expanded 200 basis points to 49.8%. Operating income totaled $173 million; adjusted for one-time items, it was $166 million.
Selling, general, and administrative expenses dropped 15% YoY to $520 million; adjusted expenses fell 13% to $530 million, excluding $13 million in insurance recovery and $3 million in restructuring costs.
As of September end, the company held $531 million in cash and equivalents. Inventory was $1.1 billion, a 3% decrease.
In May 2024, Under Armour announced a restructuring plan, later expanded in September to include closing its Rialto, California facility, raising the cost range to $140 million – $160 million. As of the second fiscal quarter, it incurred $40 million in charges and expenses, with remaining expenses expected through 2026.
"Our second quarter fiscal 2025 performance demonstrates that our strategy to reconstitute the Under Armour brand and establish a more premium position in the marketplace is gaining traction. With better-than-expected results, we are pleased to raise our full-year profitability outlook while simultaneously increasing marketing investments to amplify our brand," commented Under Armour President and CEO Kevin Plank.
2025 Outlook Updated: Under Armour raised its adjusted EPS forecast from $0.19 – $0.21 to $0.24 – $0.27. Revenue is still expected to decline by a low double-digit percentage, with North America projected to drop 14% – 16%.
The company expects gross margin to be up 125 to 150 basis points compared to the prior expectation of a 75 to 100 basis point improvement. Adjusted operating income is expected to be $165 million to $185 million, compared to the prior expectation of $140 million to $160 million.
