Under Armour downgrades profit forecast
Under Armour, the global supplier of outdoor apparel, has cut its profit forecast following a first quarter that saw its revenue come in just slightly above analysts’ expectations.
The business, which showed off its collection of fishing clothing at last month’s ICAST – the world’s largest trade show of its kind – reported sales of $1.35 billion, compared to estimates of $1.34 billion.
The company’s sales were partially attributed to higher prices and it recorded $7.7 million in net income – a drop from $59.2 million in the same quarter last year – and just $34.5 million in operating income compared to the previous year’s $121.2 million.
It reported that wholesale revenue increased 3% to $792 million and direct-to-consumer sales fell to $521 million, a decline of 7%. E-commerce revenue, which represented 39% of the quarter’s sales, fell by 6%.
Under Armour added that it still expected revenue growth of between 5% to 7%, but operating income is expected to be between $300 million and $325 million, a decline from the previous prediction of $375-$400 million.
“Having successfully executed a multi-year transformation and after delivering a record year in 2021, we are continuing to serve the needs of athletes amid an increasingly more uncertain marketplace,” said Under Armour President and CEO Patrik Frisk.
“As global supply challenges and emergent COVID-19 impacts in China eventually normalise, we are confident that the strength of the Under Armour brand, coupled with our powerful growth strategy, positions us well to deliver sustainable, profitable returns to shareholders over the long-term.”