Under Armour (NYSE: UAA) stock has declined just under 9% in premarket action after it reported first-quarter earnings.
The sports equipment and apparel company reported an adjusted loss per share of 1 cent on revenue of $1.3 billion. Analysts expected the company to report earnings per share of 6 cents on revenue of $1.32 billion.
Revenue rose 3% compared to the prior year, while gross margin decreased 350 basis points to 46.5% compared to the previous year, driven primarily by elevated freight expenses.
“Having successfully executed a multi-year transformation and after delivering a record year in 2021 – we are continuing to serve the needs of athletes amid an increasingly more uncertain marketplace,” said Under Armour President and CEO Patrik Frisk.
For fiscal 2023, Under Armour revenue is expected to grow 5% to 7% versus the comparable baseline period of $5.7 billion. This reflects a mid-single-digit growth rate in North America and a low-teens growth rate in the international business a includes approximately headwinds related to the company's “strategic decision” to work with vendors and customers to cancel orders affected by capacity issues, supply chain delays, and emergent COVID-19 impacts in China.
The company sees adjusted earnings per share for fiscal 2023 between $0.63 and $0.68.
“As global supply challenges and emergent COVID-19 impacts in China eventually normalize, we are confident that the strength of the Under Armour brand coupled with our powerful growth strategy positions us well to deliver sustainable, profitable returns to shareholders over the long-term,” added Frisk.
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