Under Armour Inc (NYSE:UA) beat third-quarter profit expectations and raised its full-year outlook on Thursday, benefiting from aggressive cost controls even as sales continued to slide and tariff pressures weighed on margins.
The sportswear maker posted adjusted earnings of $0.09 per share for the quarter, compared with analysts’ expectations for a loss of $0.02, as restructuring efforts under founder and CEO Kevin Plank helped offset declining demand in its core North American market.
Revenue fell 5% to $1.33 billion, slightly ahead of estimates, reflecting a 10% drop in North America, which remains Under Armour’s largest market. International revenue rose 3% to $577 million, providing a partial offset.
Footwear sales declined 12%, while apparel revenue fell 3%, underscoring continued pressure across key product categories. Wholesale revenue slipped 6%, while direct-to-consumer sales fell 4%, with e-commerce revenue down 7%.
Gross margin declined 310 basis points to 44.4%, largely due to higher tariffs, which the company said remain a significant headwind.
Despite the sales contraction, Under Armour doubled its adjusted earnings guidance for the year to between $0.10 and $0.11 per share and reiterated expectations for a roughly 4% decline in full-year revenue. The company forecast a full-year operating loss of about $154 million, but adjusted operating income of approximately $110 million.
For the quarter, Under Armour reported an operating loss of $150 million and a net loss of $431 million, which included a $247 million valuation allowance. On an adjusted basis, net income was $37 million.
Inventory fell 2% from a year earlier to $1.1 billion. The company ended the quarter with $465 million in cash and equivalents and said it had no borrowings under its $1.1 billion revolving credit facility.
Under Armour said its turnaround plan continues to prioritize profitability over growth, as it works through restructuring costs and persistent weakness in North America.
Shares of Under Armour added 2.4% in premarket trading Friday.