Ahead of new President and CEO Stephanie Linnartz’s debut on Feb. 27, the sportswear giant modestly outpaced revenue expectations for 2022 Q3.
Under Armour reported its third-quarter 2022 earnings on Wednesday, beating Wall Street’s expectations behind a slight surge in revenue, but a concerning outlook because of excessive inventory during the holiday season. FinTech company Refinitiv indicated that the sporting apparel company raked in $1.58 billion compared to analysts’ expectations of $1.55 billion, while earnings per share reached 16 cents adjusted versus the nine cents expected.
Here’s a quick overview of the Q3 Under Armour earnings report:
- Net Income: $121.62 million, up from $109.66 million this time last year
- Retail sales: $1.58 billion, versus $1.53 billion in Q3 one year ago
- Wholesale revenue: Up 7% from the same period last year
Despite some inventory issues during peak holiday season, Under Armour won big around the globe with a revenue increase of 45% in Latin America and 32% in Europe, the Middle East and Africa. On the flip, sales were down 9% in Asia. Furthermore, Under Armour’s 25% spike in footwear helped the company recover from a 2% decline in apparel, which makes up a majority of the company’s sales.
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What’s Ahead for Under Armour?
The future of the company should be in good hands with new President and CEO Stephanie Linnartz starting her first day with the company on Feb. 27. Linnartz, the former President of Marriott International, would not be considered the only reason behind a profit-forecast raise, but “the company clearly sounds excited about their future prospects and direction,” BMO Capital Markets analyst Simeon Siegel said via Reuters.
At the time of the hiring, the company told CNBC that it is bullish about its current strategy, but acknowledged the brand was not growing worldwide at the most ideal rate. “The board is confident that Stephanie – along with our leadership team and all of our key stakeholders – will accelerate our ability to realize the substantial opportunities for Under Armour as both an operating company and aspirational brand,” Kevin Plank, Under Armour Executive Chair and Brand Chief, said on the occasion.
With Under Armour endeavouring to make bigger leaps specifically in the e-commerce realm, the company is surely hoping that the digital acumen Linnartz showcased in transforming Marriott International can help accelerate its own initiatives in the months and years to come.
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