Sportswear brand Under Armour reported second-quarter financial results Thursday that matched revenue expectations with a 11% decline, but the company handily beat the earnings forecast as cost savings and fewer product discounts and promotions boosted profits.
Wall Street cheered the results, sending the stock up 27.2% by end of market trading—Under Armour’s second-best day since its 2005 IPO.
“We are a fundamentally stronger business today with increasingly better execution across key dimensions,” Kevin Plank, Under Armour CEO, said in the earnings release. “This includes more consistent marketplace discipline through meaningfully improved product, storytelling and sales leadership, which will deliver a sharper, unique approach to our brand position in the years ahead.”
Plank co-founded Under Armour in 1996 and returned to the CEO chair April 1 after several quarters of bad results further dinged the once high-flying brand. Under Armour’s market cap topped $22 billion in 2015 but dipped below $3 billion this April. “Our strategy to reconstitute the Under Armour brand and establish a more premium position in the marketplace is gaining traction,” Plank said.
Revenue for the three months ending Sept. 30 was $1.4 billion, down 11% from the prior year and the sixth straight quarter of declines. Earnings per share were $0.39 with adjusted EPS of $0.30 versus the consensus estimate of $0.20. The earnings beat was driven by improved gross margins and lower selling, general and administrative expenses.
Under Armour updated its fiscal 2025 outlook to adjusted EPS between $0.24 and $0.27, a five-cent boost from previous guidance. “[Under Armour] is demonstrating their ability to deliver margin upside through lower DTC promos and good cost control despite a very weak [North America business],” Paul Lejuez, Citi Wall Street analyst, said in a research note after the earnings release. Lejuez added that he still sees upside to management’s raised 2025 EPS guidance.
In addition to Plank, other top executives joined the Baltimore-based brand in 2024, including Yassine Saidi as chief product officer and Eric Liedtke as executive vice president of brand strategy.
North America is Under Armour’s biggest market, representing more than 60% of sales, and it continues to be a challenging region for the brand, as it has been for Adidas and Nike recently. UA North America revenue was down 13.5% during the first six months of the fiscal year.
For the quarter, apparel and footwear revenue fell double-digit percentages, but accessories ticked up 2.1% to $116.4 million.
(This story has been updated with end-of-day stock movement.)
