UAA - Under Armour Non-GAAP EPS of $0.20 beats by $0.04 revenue of $1.57B beats by $20M

• Under Armour press release ( NYSE: UAA ): Q3 Non-GAAP EPS of $0.20 beats by $0.04 .
• Revenue of $1.57B (+1.3% Y/Y) beats by $20M .
• Shares +2.8% PM.
• Wholesale revenue increased 4 percent to $948 million, and direct-to-consumer revenue decreased 4 percent to $577 million due to a 9 percent decline in owned and operated store revenue partially offset by a 4 percent increase in eCommerce revenue, which represented 36 percent of the total direct-to-consumer business during the quarter.
• FY23 Outlook: Revenue is expected to grow at a low single-digit percentage rate compared to the previous expectation of 5 to 7 percent growth due primarily to a more challenging retail environment and additional negative impacts from changes in foreign currency. Currency-neutral revenue is expected to be up at a mid-single-digit percentage rate compared to the previous expectation of 7 to 9 percent growth.
• Gross margin remains unchanged from the previous outlook of a 375 to 425 basis point decline.
• Selling, general & administrative expenses are expected to be down slightly against the prior year as the company manages costs amid uncertain market conditions.
• Operating income is expected to reach $270 to $290 million compared to the previous range of $300 to $325 million. Excluding an expense related to ongoing litigation matters, adjusted operating income is expected to reach $290 to $310 million compared to the previous range of $310 to $335 million.
• Diluted earnings per share is expected to be $0.56 to $0.60 compared to the previous expectation of $0.61 to $0.67. This includes a $0.28 benefit related to a tax valuation allowance release expected to be realized during the fiscal year. Of this $0.28 benefit, $0.16 is related to prior restructuring. Additionally, there is a $0.04 negative impact from a legal expense related to ongoing litigation matters. Excluding these net positive impacts of $0.12, adjusted diluted earnings per share is expected to be $0.44 to $0.48 ($0.44 consensus) compared to the previous expectation of $0.47 to $0.53.
• Capital expenditures remain unchanged from an expectation of approximately $225 million.

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