Under Armour tops profit expectations, boosts forecast despite sales decline

Under Armour Inc (NYSE:UA) bushed third-quarter nett expectations and raised its full-year outlook connected Thursday, benefiting from assertive outgo controls adjacent arsenic income continued to descent and tariff pressures weighed connected margins.

The sportswear shaper posted adjusted net of $0.09 per stock for the quarter, compared with analysts’ expectations for a nonaccomplishment of $0.02, arsenic restructuring efforts nether laminitis and CEO Kevin Plank helped offset declining request successful its halfway North American market.

Revenue fell 5% to $1.33 billion, somewhat up of estimates, reflecting a 10% driblet successful North America, which remains Under Armour’s largest market. International gross roseate 3% to $577 million, providing a partial offset.

Footwear income declined 12%, portion apparel gross fell 3%, underscoring continued unit crossed cardinal merchandise categories. Wholesale gross slipped 6%, portion direct-to-consumer income fell 4%, with e-commerce gross down 7%.

Gross borderline declined 310 ground points to 44.4%, mostly owed to higher tariffs, which the institution said stay a important headwind.

Despite the income contraction, Under Armour doubled its adjusted net guidance for the twelvemonth to betwixt $0.10 and $0.11 per stock and reiterated expectations for a astir 4% diminution successful full-year revenue. The institution forecast a full-year operating nonaccomplishment of astir $154 million, but adjusted operating income of astir $110 million.

For the quarter, Under Armour reported an operating nonaccomplishment of $150 cardinal and a nett nonaccomplishment of $431 million, which included a $247 cardinal valuation allowance. On an adjusted basis, nett income was $37 million.

Inventory fell 2% from a twelvemonth earlier to $1.1 billion. The institution ended the 4th with $465 cardinal successful currency and equivalents and said it had nary borrowings nether its $1.1 cardinal revolving recognition facility.

Under Armour said its turnaround program continues to prioritize profitability implicit growth, arsenic it works done restructuring costs and persistent weakness successful North America.

Shares of Under Armour added 2.4% successful premarket trading Friday.