It wasn’t pretty, but it was better than expected.
Under Armour early Thursday reported an operating loss of $300 million in the first quarter of fiscal 2025 on sales that dropped 10 percent to $1.2 billion. Excluding transformation expenses and other charges that totaled $308 million, the company’s adjusted operating income was $8 million.
North American sales, the company’s largest market, continued to struggle with a 14 percent decline in volume to $709 million. International revenue also decreased in the quarter, falling 2 percent to $473 million. Revenue in EMEA was flat, Under Armour reported, falling 10 percent in Asia-Pacific and rising 16 percent in Latin America.
Wholesale revenue decreased 8 percent to $681 million, and direct-to-consumer revenue was down 12 percent to $480 million. Owned and operated store sales declined 3 percent. Because of planned decreases in promotional activities, sales in the e-commerce channel, which represents 34 percent of the company’s total direct-to-consumer business, decreased 25 percent.
By category, apparel revenue decreased 8 percent to $758 million, footwear revenue was down 15 percent to $310 million, and accessories revenue was down 5 percent to $93 million.
As a result of these numbers, which are part of a restructuring plan unveiled in May, Under Armour updated its fiscal 2025 outlook, projecting revenue to be down in the low double digits. In North America, sales are now expected to be down 14-16 percent, compared to the 15-17 percent previously projected, as the company “works to reset this business meaningfully” following years of heightened promotional activity, particularly in its direct-to-consumer business, the company said. Internationally, a low-single-digit percent decline is now projected, which includes flat results in EMEA offset by a high-single-digit decline in its Asia-Pacific business “due to developing macroeconomic pressures.”
For the full year, the operating loss is now expected to be $194 million to $214 million with adjusted operating income expected to be $140 million to $160 million versus the previous expectation of $130 million to $150 million.
In May, Under Armour revealed a restructuring plan estimated at $70 million to $90 million.
“We are encouraged by early progress in our efforts to reconstitute a premium positioning for the Under Armour brand and pleased with our first quarter fiscal 2025 results that were ahead of expectations,” said Kevin Plank, president and chief executive officer. “Our renewed energy and alignment are proving to be critical enablers as we work to deliver superior products and storytelling while driving efficiencies, reducing promotional activity, and complexity.”
Plank continued, “With the strongest product organization we’ve had in many years and strengthened brand leadership, we’re confident in our ability to elevate our design and innovation over the coming seasons and amplify our unique connection with athletes as their brand of choice.”
In March, Plank, Under Armour’s founder, stepped back in as CEO, ousting Stephanie Linnartz, the former Marriott International executive who had helmed the Baltimore-based sports brand for just over a year.
