Maryland-based athletic brand Under Armour is showing symptoms of not being immune to the current market conditions.
Revenue was down 5 percent to $1.4 billion in the third quarter for the brand. During the third quarter, operational challenges due to the implementation of the company’s enterprise resource planning system and related service levels along with lower North American demand negatively impacted revenue. Revenue to wholesale customers declined 13 percent to $880 million and direct-to-consumer revenue was up 15 percent to $468 million.
North America challenges impacted results with revenue down 12 percent. Strong international momentum continued with revenue up 35 percent, representing 22 percent of total revenue. Within its international business, revenue in EMEA was up 22 percent, up 52 percent in Asia-Pacific, and up 33 percent in Latin America.
“While our international business continues to deliver against our ambition of building a global brand, operational challenges and lower demand in North America resulted in third-quarter revenue that was below our expectations,” said Kevin Plank, chairman and CEO at Under Armour. “Based on these issues in our largest market, we believe it is prudent to reduce our sales and earnings outlook for the remainder of 2017.”
The brand also maintained that its outlook for its fiscal 2017 net revenue is expected to be up at a low single-digit percentage rate.
“Against this difficult backdrop, our management team is working aggressively to evolve our strategy and level of execution to proactively address these challenges,” added Plank. “We understand that success in our next chapter requires managing with focused financial discipline and driving excellence into every area of our business while we amplify innovation, deliver fresh product and connect even more deeply with our consumers.”