Under Armour Beats Projections in Q2 as Restructuring Continues
Despite sales that were down in the double digits across the board in the second quarter, Under Armour claimed it continued to make headway in its quest to become a more premium brand.
In the period ended Sept. 30, the Baltimore-based sports giant, reported operating income was $173 million. Excluding charges, the adjusted operating income was $166 million. Net income was $170 million and adjusted net income was $131 million.
Overall sales were down 11 percent to $1.4 billion, in line with expectations. North America revenue decreased 13 percent to $863 million, and international revenue decreased 6 percent to $538 million. In the international business, revenue in EMEA was down 1 percent, down 11 percent in Asia-Pacific, and down 13 percent in Latin America.
Wholesale revenue decreased 12 percent to $826 million, and direct-to-consumer revenue was down 8 percent to $550 million. Revenue from owned and operated stores remained flat. As a result of planned decreases in promotional activities, e-commerce revenue — which represented 30 percent of the company’s direct-to-consumer business in the quarter — decreased 21 percent.
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By category, apparel revenue decreased 12 percent to $947 million, footwear revenue was down 11 percent to $313 million, but accessories revenue was up 2 percent to $116 million.
“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,” said Under Armour president and chief executive officer Kevin Plank. “With better-than-expected results, we are pleased to raise our full-year profitability outlook while simultaneously increasing marketing investments to amplify our brand.”
Plank continued, “We are a fundamentally stronger business today with increasingly better execution across key dimensions. This includes more consistent marketplace discipline through meaningfully improved product, storytelling, and sales leadership, which will deliver a sharper, unique approach to our brand position in the years ahead.”
As reported, in May of this year, shortly after Plank took back the reins of the company he founded, Under Armour unveiled a restructuring plan, one that was updated in September following the announcement of its plan to close a distribution facility in Rialto, Calif. That move increased restructuring charges to $140 million to $160 million. As of the second fiscal quarter of 2025, the company said it has recognized $28 million in restructuring and impairment charges and $11 million in other related transformational expenses. The remainder of the charges are expected to occur during fiscal 2025 and fiscal 2026, the company said.
While the figures reported Thursday morning were not pretty, they were not unexpected and led the company to updates its fiscal 2025 outlook. Revenue is now expected to decline at a low double-digit rate — that includes an anticipated 14 to 16 percent decline in North America, a low single-digit percent decline in its international business, with flat results in EMEA offset by a high single-digit decline in its Asia-Pacific business.
The operating loss is expected to be less, however. Under Armour now expects that figure to come in at $176 million to $196 million, compared to the previous expectation of $220 million to $240 million. Excluding the restructuring charges, adjusted operating income is expected to be $165 million to $185 million, compared to the prior expectation of $140 million to $160 million.
