Feb 8 (Reuters) – Underneath Armour Inc (UAA.N) raised its annual revenue forecast on Wednesday after quarterly outcomes surpassed expectations because of resilient shopper spending and deep reductions that attracted vacation consumers.
Elevated promotions provided in the course of the all-important vacation season inspired prospects to look previous recession worries and fill up on its athletic footwear and hoodies. Steep reductions had additionally helped rival Nike (NKE.N) ship a powerful quarter in December.
Nonetheless, Underneath Armour's margins got here beneath strain from its try to clear extra stock, a powerful U.S. greenback and better freight and manufacturing costs. It now expects gross margin for the total yr to say no on the larger finish of its prior forecast of 375 to 425 foundation factors.
Elevated sector-wide inventories will end in ongoing promotions lasting longer than beforehand anticipated, Chief Finance Officer David Bergman stated in a post-earnings name, including that the macroeconomic backdrop is predicted to remain uneven in calendar 2023.
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Shares of the corporate have been down about 3% amid broader market declines.
In December, Underneath Armour named veteran hotelier Stephanie Linnartz as its high boss, betting on her expertise in branding technique and e-commerce to assist revive gross sales.
E-commerce gross sales rose 7% within the reported quarter.
BMO Capital Markets analyst Simeon Siegel stated it might be too early to say Linnartz was a key motive behind the profit-forecast elevate, however “the corporate clearly sounds enthusiastic about their future prospects and route.”
The Baltimore, Maryland-based attire agency posted third-quarter adjusted revenue of 16 cents, beating analysts' common estimate of 9 cents, based on Refinitiv IBES information.
It expects adjusted revenue of 52 cents to 56 cents per share for fiscal 2023, in contrast with its earlier forecast of 44 cents to 48 cents.
Reporting by Ananya Mariam Rajesh in Bengaluru; Modifying by Devika Syamnath
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