LONDON (ShareCast) - (Sharecast News) - Under Armour announced its financial results for the first quarter ended 31 March on Tuesday, with revenue up 6 % at $1.2bn, or ahead 4% on a currency-neutral basis.
The US-based fitness products maker said revenue to wholesale customers increased 1% to $779m, and direct-to-consumer revenue was up 17% to $352m.

It said the direct-to-consumer business represented 30% of global revenue in the quarter.

North America revenue was relatively flat, falling 1% on currency-neutral basis, while the international business continued to deliver strong growth with a 27% increase, or 19% at constant currencies, representing 24 percent of total revenue.

Within the international business, revenue in Europe, Middle East and Africa was 23% higher, while it rose 35% in Asia-Pacific and 21% in Latin America.

Apparel revenue was 7% higher at $766m for the quarter, which the board said was driven by strength in men's training.

Footwear revenue was up 1% at $272m, with strength in running tempered by team sports and global football.

Accessories revenue improved 3% to $92m, led by men's training.

Under Armour's gross margin declined 120 basis points to 44.2%, as benefits from changes in foreign currency rates were more than offset by accelerated inventory management initiatives.

The company's adjusted gross margin, which excluded an $8m impact related to restructuring efforts, was 44.8% - a decrease of 60 basis points compared to the prior year.

Selling, general and administrative expenses increased 3% to $515m, or 43.4% of revenue driven by continued investments in the direct-to-consumer, footwear and international businesses.

Restructuring and impairment charges were put at $37m.

The company's operating loss totalled $29m, while its adjusted operating income was $16m.

Its net loss was $30m, although excluding the impact of the restructuring plan, adjusted net income was $1m.

Diluted losses per share were seven cents, while adjusted diluted earnings per share were nil.

The board said inventory increased 27% to $1.1bn during the period, while cash and cash equivalents were ahead 65% at $284m.

There were no changes to the company's full year 2018 outlook as provided on 13 February, with net revenue for the year expected to be up at a low single-digit percentage rate, which the board said reflected a mid-single-digit decline in North America, as well as international growth of greater than 25%.

Under Armour's gross margin was expected to increase around 50 basis points to 45.5%, due to benefits from lower planned promotional activity, product costs, channel mix and changes in foreign currency.

Operating income was forecast to reach between $20m and $30m, although excluding the impact of continued restructuring efforts, adjusted operating income was expected to be between $130m and $160m.

Interest and other expense net was planned at approximately $45m.

Excluding the impact of the restructuring efforts, adjusted diluted earnings per share were expected to be in the range of 14 to 19 cents, with capital expenditures planned at around $225m, compared to $275m in 2017.

"Our first quarter results demonstrate measured progress against our focus on operational excellence and becoming a better company," said Under Armour chairman and CEO Kevin Plank.

"As we continue to build our global brand by delivering innovative performance products to our athletes, amplifying our story, further strengthening our go-to-market process, and leveraging our systems to create even deeper consumer connections - we remain confident in our ability to deliver on our full year targets."

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