American sportswear giant Under Armour's revenue at $1.6 bn in Q2 FY24

In a detailed breakdown, wholesale revenue dipped by 1 per cent to $940 million, while direct-to-consumer sales saw a 3 per cent rise to $596 million. This uptick was partly due to a 2 per cent increase in e-commerce, which now accounts for 35 per cent of the direct-to-consumer segment. Owned and operated store revenue also climbed by 4 per cent, the company said in a press release.

Geographically, North America faced a 2 per cent decline, with sales at $991 million. On the other hand, international revenues painted a brighter picture with a 5 per cent increase to $573 million, equivalent to a 3 per cent rise when adjusted for currency fluctuations. Within the international markets, the Europe, the Middle East and Africa (EMEA) region experienced a 9 per cent surge in revenue (4 per cent currency-neutral), and Asia-Pacific enjoyed a 3 per cent growth (7 per cent currency-neutral). Latin America, however, saw a downturn of 8 per cent (19 per cent currency-neutral).

Product-wise, apparel continued to be a strong suit, marking a 3 per cent increase in revenue at $1.1 billion. Footwear, however, stumbled with a 7 per cent decrease in revenue to $351 million. Accessories saw a revenue growth of 3 per cent to $114 million.

The sportswear company's gross margin showcased a notable improvement, expanding by 260 basis points to reach 48.0 per cent, a boost primarily driven by lower freight expenses within the supply chain.

Operating expenses reflected a slight escalation, with selling, general, and administrative costs ticking up 2 per cent to $606 million. Nonetheless, operating income remained robust at $146 million, leading to a net income of $110 million. Consequently, diluted earnings per share were reported at $0.24.

The company also noted a 6 per cent increase in inventory levels, now standing at $1.1 billion, a move potentially positioning the company for future demand.

"Our second quarter results, particularly profitability, exceeded our expectations," said Under Armour president and CEO Stephanie Linnartz. "Consequently, we are maintaining our fiscal 2024 operating income and EPS outlook even as we lower our revenue expectations primarily in response to challenges in North America during the back half of the year."

ALCHEMPro News Desk (DP)