Published by Global Banking and Finance Review
Posted on February 6, 2025
(Reuters) -Under Armour on Thursday raised its forecast for annual profit after beating third-quarter results, helped by the athletic wear maker's efforts to dial down on discounts and improving demand in North America and Asia.
The company's shares were up about 10% in premarket trading.
Consumers looking for on-trend shoes and apparel during the holiday quarter aided in boosting sales for sportswear companies, igniting hopes of demand recovery amid slowdown in crucial markets like China.
Quarterly net revenue in Under Armour's North America segment, a major revenue contributor, fell 8%, compared with a 12% decline a year ago.
While in the Asia-Pacific region its net revenue fell 5%, compared with 7% a year earlier.
Last month, German peer Adidas managed to pull off a successful turnaround with upbeat sales in its latest quarter.
The Baltimore, Maryland-based company has also been beefing up its marketing investments to boost brand visibility and appeal to younger customers amid rising competition.
Under Armour adapting to its founder and CEO Kevin Plank's plans of selling apparel and footwear at full prices further helped it in improving margins, which were battered with heavier discounts over the last couple of years.
Lower product and freight costs helped the company in expanding its quarterly gross margins by 240 basis points to 47.5%.
The company expects annual adjusted earnings per share to be in the range of 28 cents to 30 cents, compared with a prior range of 24 cents to 27 cents per share.
The company's quarterly revenue fell 5.7% to $1.40 billion from a year ago, that still came ahead of analysts' estimates of $1.34 billion, as per data compiled by LSEG.
It posted quarterly adjusted earnings per share of 8 cents for the quarter ended Dec. 31, beating estimates of 4 cents per share.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shailesh Kuber)
