The US sporting goods provider Under Armor Inc. was able to surprisingly significantly increase its profit in the second quarter of the 2023/24 financial year. In view of weak demand in North America, the company lowered its sales forecast for the full year on Wednesday.
In the quarter ended at the end of September, Under Armor reported sales of $1.57 billion (1.47 billion euros). This corresponded to a slight decrease compared to the same period last year (-0.5 percent). Adjusted for exchange rate changes, revenue fell by 1.1 percent.
The weak demand in North America is weighing on sales development
In North America, which remains by far the company’s most important market region, sales fell by 2.0 percent (-1.8 percent adjusted for currency effects) to $991.4 million. In Latin America it fell by 7.7 percent (-19.3 percent adjusted for currency effects) to 53.7 million US dollars.
However, there was a strong upward trend in the EMEA region, which includes Europe, the Middle East and Africa: revenue there rose by 9.3 percent (currency-adjusted +4.0 percent) to 287.1 million US dollars. In the Asia-Pacific region, the sporting goods retailer achieved a sales increase of 2.8 percent (currency-adjusted +6.6 percent) to $232.1 million.
Net profit exceeded market expectations in the third quarter
Thanks to a higher gross margin, operating income reached $145.8 million, exceeding the level of the previous year’s quarter by 22.1 percent. Net profit rose 26.1 percent to 109.6 million US dollars (102.7 million euros), exceeding market expectations.
Because management expects further difficulties in North America in the second half of the year, it lowered its sales forecast for the entire fiscal year. It now expects a decline of two to four percent compared to the previous year. Up until now, the sporting goods retailer had promised consistent or even slightly improved revenues. However, the earnings targets remained unchanged.