Interface News Reporter | Qin Siyue
In early November, American sports brand Under Armour announced its Q2 2025 financial results as of September 30th. The performance report shows that during the reporting period, brand revenue decreased by 11% year-on-year to $1.4 billion; Adjusted earnings per share of $0.30; The gross profit margin increased to 49.8%.
Looking at channels separately, in the second quarter, both Andema's wholesale revenue and DTC (direct to consumer) revenue decreased: wholesale decreased by 12% to $823 million; Direct to consumer revenue decreased by 8% to $550 million. E-commerce revenue has also declined, with a 21% decrease in revenue for this quarter.
Divided by category, during the reporting period, Andema's clothing revenue decreased by 12% to $947 million, and its footwear revenue decreased by 11% to $313 million. Accessory revenue increased by 2% to $116 million, however, due to the small base, it was unable to offset the decline in the first two categories.
Andema's domestic and international business in the United States also sounded the alarm simultaneously. Revenue in the North American market decreased by 13% to $863 million; International business revenue decreased by 6% to $538 million. In international business, revenue in the Europe, Middle East, and Africa (EMEA) market decreased by 1%, the Asia Pacific market where the Chinese market is located decreased by 11%, and revenue in the Latin American market decreased by 13%.
However, Kevin Plank expressed satisfaction with this quarter's performance during the earnings conference: "We are pleased with another profitable quarter, thanks to the actions we have taken to reduce promotions and discounts in our DTC business." Kevin Plank believes that the company is currently in the early stages of a "reset" plan, and some financial data will not improve significantly soon. Transformation is not an overnight task. Although we are in the early stages of a reset, I believe this indicates that our brand's strategy is beginning to gain traction
The "reset" plan mentioned by Kevin Plank was proposed after he returned to the position of CEO of Adama in April.
When the plan was initially proposed, the company prepared a budget of $70 million to $90 million for it. The restructuring plan will last for 18 months and will be carried out simultaneously in multiple functional departments. On the sales side, Andema wants to change the current situation of excessive dependence on discounts. The brand plans to halve the promotional days for the 2025 fiscal year and actively provide exclusive high-quality products to its members. Compared to promoting sales volume, Andema hopes to increase its earning power through high unit prices. To this end, Andema has also prepared supporting measures on the product side: Andema plans to reduce SKUs (minimum inventory units) by about 25% and increase the scale of high-quality products entering the warehouse.
It should be noted that after Andema announced the closure of its distribution facility in Rialto, California in September, the restructuring costs have exceeded $100 million.
In Kevin Plank's envisioned "comeback" process, the Chinese market and the Curry brand will play an important role. At the earnings conference, the "leader" specifically mentioned Curry's China trip in September. During Curry's trip to China, sales of Curry products doubled, brand exposure increased, and we gained nearly 34 million live views and incredible social media engagement. As we expand our business scale in the coming years, we will be more proactive in leveraging Curry's global influence
Interestingly, the Curry brand, which serves as a brand pioneer, has chosen to open its global first store in Chengdu, China this year, with a clear intention to expand into the Chinese market.
Despite a series of restructuring plans being carried out in an orderly manner, Andema still cautiously sets revenue expectations in the face of enormous performance pressure. For the third quarter, the company expects a 10% decline in revenue. For the entire fiscal year 2025, the company expects its annual revenue to decline at a low double-digit rate, with operating losses ranging from $176 million to $196 million and adjusted earnings per share ranging from $0.24 to $0.27.