As against the earlier estimate of a 15-17 per cent drop, Under Armor now expects revenues from North America business to decline in the range of 14-16 per cent in FY25.
The brand posted a surprise profit in Q1, FY25 that ended on August 8. This rise was driven by improved margins from selling its sports apparel at full price and maintaining lower inventory levels, even as consumers become more selective with their spending.
Currently, the retailer is focusing on cutting promotions, reducing inventory, and streamlining its workforce. By prioritising higher-margin items like men’s apparel, the company managed to expand its gross margins by 110 basis points to 47.5 per cent, while inventory decreased by 15 per cent to $1.1 billion.
Simeon Siegel, Analyst, notes, the company is better situated selling less and charging more. The improvement in profitability in this quarter suggests that the initial steps of this reset are working, he adds.
Kevin Plank, CEO, highlights, he share of full-price products sold online increased significantly despite the company being even less promotional than planned.
However, revenues in the brand’s largest market, North America dropped by 14 per cent due to inflationary pressures on consumer budgets. The brand’s international revenues also declined by 2 per cent. Overall, the company's first-quarter revenue fell by 10 per cent to $1.18 billion, a smaller drop than the nearly 13 per cent decline anticipated by analysts.
