Underneath Armour on Wednesday minimize its revenue forecast for the fiscal yr 2023 as extra promotions on its athletic attire ate into margins.
The corporate now expects earnings per share for the complete yr to return in between 61 cents and 67 cents, down from earlier steering of between 79 cents and 84 cents. Gross margin is predicted to be down 375 to 425 foundation factors, a worsened outlook from the earlier vary of 150 to 200 foundation factors. A foundation level equals 0.01 share level.
Nonetheless, Underneath Armour’s fiscal first-quarter outcomes matched analysts’ expectations.
Right here’s what the corporate reported in contrast with what Wall Road was anticipating, primarily based on a survey of analysts by Refinitiv:
- Earnings per share: 3 cents, adjusted, vs. 3 cents anticipated
- Income: $1.35 billion vs. $1.34 billion anticipated
The corporate mentioned income was pushed partially by increased costs. North America income throughout the interval was flat yr over yr at $909 million, whereas worldwide income declined 3.3% to $431 million, dragged decrease by an 8% lower within the Asia-Pacific area. On a foreign money impartial foundation, worldwide income rose 1.5%.
Gross margin for the interval declined 280 foundation factors in contrast with the prior yr.
The price of items offered elevated from the identical three months in 2021 to $718.9 million, making up 53.3% of internet income in contrast with 50.5% of internet income the yr prior.
Chief Monetary Officer David Bergman mentioned on an earnings name the corporate is “not enthusiastic about being extra promotional” however defended the reductions given the inflationary atmosphere.
Internet earnings earlier than changes was $7.68 million, or 2 cents per share.
Underneath Armour reported $10 million in authorized bills tied to ongoing litigation. Final week, the corporate agreed to settle a lawsuit with UCLA for $67.49 million over a terminated attire contract.
The corporate mentioned it expects the litigation prices to proceed to weigh on income, citing a 2 cent destructive affect on EPS for the complete yr.
Kevin Plank, Underneath Armour founder and government chairman, mentioned Wednesday the corporate would select a brand new CEO “by yr’s finish.” Interim CEO Colin Browne has been within the position since Patrick Frisk stepped down June 1.