Under Armour Cuts Forecast For Annual Sales On Sluggish North America

Sportswear maker Under Armour said Wednesday that sales in the current fiscal year will be lower than previously expected.

The company forecasts a drop of 2% to 4% in the 2024 fiscal year, which ends in March. Previously, the expectation for the period was of unchanged or slightly elevated revenue.

The cut in the outlook was announced with the results for the quarter ended in September, when Under Armour posted sales of $1.57 billion, unchanged from a year earlier. Profit rose 26% to $109.6 million.

"Our second quarter results, particularly profitability, exceeded our expectations," Chief Executive Officer Stephanie Linnartz said in the earnings statement. "Consequently, we are maintaining our fiscal 2024 operating income and EPS outlook even as we lower our revenue expectations primarily in response to challenges in North America during the back half of the year."

Revenue in North America, the biggest market for the company, fell 2% in the past quarter. That was offset by an increase of 5% in international markets.

Despite the more pessimistic view on revenue, Under Armour raised its forecast for gross margin to as much as 100 to 125 basis points, from 25 to 75 basis points.

The company shares reacted to the new forecast with a gain.