Under Armour’s revenue fell in the fiscal third quarter amid restructuring efforts and fewer in promotional activities.
The sportswear brand’s net income plunged 98.9 per cent to $1.2 million while revenue fell 5.7 per cent to $1.40 billion.
North America’s revenue declined 7.8 per cent while Latin America revenue was down 15.5 per cent. Asia Pacific posted a decrease of 5.1 per cent and only EMEA witnessed positive revenue growth – at 4.9 per cent.
“It is certainly the case that the pullback on promotional activity over the quarter damaged sales,” said Neil Saunders, GlobalData MD.
“Under Armour had fewer deals and offers, especially on its website, and it was much more selective on discounting.”
Saunders added that Under Armour implemented the strategy at a time when consumers were prioritising value for money and that the brand was not among the top ‘must have’ brands over the holidays.
“This is, in a nutshell, one of the big challenges for Under Armour: It needs to find a space to play and own in a market that has become increasingly crowded and competitive,” said Saunders.
For the full fiscal year, Under Armour forecasts revenue to fall 10 per cent, which includes a 12 per cent to 13 per cent decline in North America and a mid-single-digit decrease in international sales.
“As we sharpen our focus on strengthening the Under Armour brand, our updated product strategy and enhanced marketplace discipline combined with the shift to a category-led operating model are driving our transformation,” said Kevin Plank, Under Armour president and CEO.
“Additionally, we will enter a pivotal new chapter in our marketing strategy by launching a dynamic, multi-year initiative of storytelling that showcases our incredible products, talented athletes, and influential creators.”
