Under Armour Inc (NYSE:UA) shares rose after the sportswear maker reported second-quarter earnings that exceeded analysts’ expectations, as well as its own.
However, while it maintained its outlook for full-year earnings, it lowered its revenue expectations due to challenges in North America, its biggest market, during the back half of the year.
For the three months to September 30, 2023, the company posted flat revenue of $1.6 billion as revenue increases in EMEA and the Asia Pacific region made up for declines in North America and Latin America.
Revenue from apparel and accessories rose, compensating for a decline in footwear revenue.
Diluted earnings per share (EPS) rose 26% to $0.24, ahead of the $0.21 consensus estimate of analysts, according to Zacks Investment Research.
The company has guided for full-year 2024 revenue to be 2% to 4% down versus its previous expectation of flight to slightly higher.
However, it expects a gross margin of 100 to 125 basis points against its previous guidance of 25 to 75 basis points.
It still expects to achieve diluted EPS of between $0.47 and $0.51.
"As we execute against our strategic priorities, we will continue to take a balanced approach to driving profitability in the near term while taking the necessary steps to invest in the talent, systems, and processes to drive the top-line growth that Under Armour is capable of over the long term,” president and CEO Stephanie Linnartz commented in a statement.
The company’s shares rose 3.9% to $7.45 by late morning in New York, paring their 2023 losses to 27%.
Contact the author at stephen.gunnion@proactiveinvestors.com