‘Dismal numbers’: Under Armour is ‘struggling for relevance’ says analyst

Sports apparel company Under Armour has reported a rocky start to fiscal 2025, with revenue down 10 per cent to US$1.2 billion, and an operating loss of $300 million.

In North America, sales were down 14 per cent to $709 million, and internationally by 2 per cent to $473 million. Sales in EMEA (Europe, the Middle East, and Africa) remained the same, down 10 per cent in Asia-Pacific and up 16 per cent in Latin America.

Wholesale revenue dwindled by 8 per cent to $681 million, while direct-to-consumer was down by 12 per cent to $480 million. Sales from owned and operated stores declined by 3 per cent. 

Meanwhile, earnings from apparel decreased by 8 per cent to $758 million, footwear sales plummeted by 15 per cent to $310 million, and accessories revenue decreased by 5 per cent to $93 million.

According to the company, its gross margin increased to 47.5 per cent primarily due to reduced discounting and lower product costs, but this was offset by “unfavourable” foreign currency impacts. 

Despite these challenges, CEO Kevin Plank expressed optimism, stating, “We are encouraged by early progress in our efforts to reconstitute a premium positioning for the Under Armour brand”. 

“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,” he added. 

However, analyst Neil Saunders from GlobalData is less positive, describing the results as “dismal” and that Under Armour is “struggling for relevance” in a competitive market.

“To say Under Armour has started its new fiscal year on a downbeat note would be an understatement,” he continued.

“The one crumb of comfort is that investors were forewarned of this deterioration – some of which is down to yet another brand reset as the company tries to improve its relevance.

Saunders said despite all the “gloomy numbers”, he acknowledged that the company’s restructuring plans are necessary but stressed that success will depend on consistent execution.

“The plans set out by management are reasonable, but the key to success will be strong and consistent execution – something Under Armour has not always excelled in. And the company needs to start showing signs of progress sooner rather than later,” he concluded. 

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