Last we checked in with Under Armour in October, the Baltimore-based activewear giant was — in the immortal words of Kylie Jenner — like, realizing stuff. Which is to say: It had just experienced a very rough third quarter, with North American revenue declining 12 percent and company shares on the New York Stock Exchange dropping a startling 23 percentage points in just one day. (Not to mention the company's ongoing "Trump problem.") Forget the ambitions of one day surpassing the likes of Adidas or, say, even Nike — Under Armour first had to scale the ditch in which it found itself. Something needed to change.
On Nov. 1, just one day after the retailer announced said sales torpedo, Under Armour announced that Ben Pruess, the brand's president of sports fashion and architect of the more modern, fashion-adjacent Under Armour Sportswear (UAS) collection, was set to exit the brand. Meanwhile, UAS as we knew it had plans to shutter to become "Under Armour Sportstyle," an initiative focusing on collaborations with designers and influencers, starting with A$AP Rocky.
So, it's been six months and two financial quarters since all that happened. How has Under Armour fared?
In the three months ending March 31, 2018, Under Armour saw its revenue jump 6 percent to $1.2 billion, according to a report released on Tuesday. Meanwhile, wholesale revenue was up 1 percent to $779 million; direct-to-consumer revenue — representing 30 percent of global sales this quarter — was up, too, coming in at $352 million, a 17 percent increase. Elsewhere, apparel — driven by its "men's training" category — grew 7 percent; footwear, 1 percent; accessories, 3 percent. And as a whole, inventory jumped 27 percent to $1.1 billion. All of this is, objectively, good news.
However, it's still not great, and by no means is Under Armour back on its feet. Restructuring and impairment charges — i.e., whatever it has cooking with Under Armour Sportstyle — rang in at $37 million, leading to a net loss of $30 million; excluding the impact of its restructuring, though, adjusted net income was $1 million.
You've got to spend money to make money, of course, and Under Armour is aware of that: For the rest of the year, the retailer expects for net revenue to be up at a low single-digit percentage rate as they continue to cut costs on stuff like promotional activity and product development. In a statement, Chairman and CEO Kevin Plank called this "measured progress," also noting that the company remains confident that it will deliver on its full-year targets — the results of which we'll find out in another three months. See you back here then.