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Under Armour Lowers Full-Year Sales Outlook as Fiscal First-Quarter Revenue Misses Street Views

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Under Armour Lowers Full-Year Sales Outlook as Fiscal First-Quarter Revenue Misses Street Views

Under Armour (UAA, UA) lowered its full-year revenue outlook on Friday amid weak demand in North America and Asia Pacific, while the sportswear maker's fiscal first-quarter sales fell short of market estimates.

The company now expects revenue to decline by a mid-single-digit percentage for fiscal 2027, compared with its previous projections for a "slight" decrease. The consensus on FactSet is for sales of $4.94 billion, representing a year-over-year decline of 0.6%.

Under Armour's Class A and Class C shares were down more than 5% during Friday trading.

Under Armour attributed the guidance revision to soft demand, particularly in North America and Asia Pacific. It now expects a mid-single-digit sales decline in North America and a low-single-digit decline in Asia Pacific, compared with its previous forecast for a low-single-digit decline and a low-single-digit increase, respectively.

The company said it remains focused on balancing short-term revenue opportunities with disciplined marketplace management and full-price selling.

"As we navigate a challenging consumer demand environment, we continue to make progress in building a more focused Under Armour, despite updating our full-year revenue outlook," Chief Executive Kevin Plank said in the earnings release. "By simplifying the business, we are operating with greater discipline and better positioned to protect profitability, while still investing in a sharper product portfolio."

The sportswear maker continues to anticipate adjusted earnings of $0.08 to $0.12 per share for the current fiscal year, while Wall Street is looking for $0.11.

For the quarter ended June 30, Under Armour's revenue moved down 3% to $1.1 billion, just shy of the average analyst estimate of $1.11 billion. Adjusted EPS rose to $0.05 from $0.02 in the year-ago quarter, in line with the Street's view.

North America sales dropped 9%, while Europe, the Middle East and Africa climbed 12%. Revenue in Asia Pacific fell 6.6% and Latin America inclined 7.7%.

Wholesale revenue slipped 1.6% to $638.5 million, while direct-to-consumer sales were off 5.8% to $436.5 million. Apparel revenue declined 1.7% to $734 million, footwear retreated 7.7% to $245.3 million, while accessories shed 4.4% to $95.7 million.

For the ongoing quarter, Under Armour expects an adjusted loss of between $0.01 and $0.03 per share, compared with the market's current forecast of non-GAAP EPS of $0.05.

Last month, UBS Securities said it expected Under Armour's first-quarter report to be largely in line with expectations. The brokerage at the time said it sees the company driving considerable product innovation over the next few years, supporting a potential recovery in its revenue growth over the long term.

Footwear maker Crocs (CROX) last month issued downbeat third-quarter earnings guidance. At the end of June, Nike (NKE) reported a year-over-year decline in its fiscal fourth-quarter revenue.

Price: $6.08, Change: $-0.32, Percent Change: -4.98%

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