Investing.com -- Under Armour (NYSE:UA) has reported a decline in first-quarter net revenue, but still slightly beat estimates, as a dip in expenses and e-commerce demand helped mitigate the broader impact of a recent slowdown in consumer spending.
The company has been rolling out larger discounts in an attempt to woo inflation-hit customers wary of shelling out cash on its form-fitting athletic shirts and other exercise gear, although this strategy and input cost pressures have squeezed margins.
Net revenue fell by 2% to $1.32 billion in the three months until the end of June, marginally above Bloomberg consensus estimates of $1.3B. A slip in wholesale revenue was tempered by Under Armour's e-commerce business, which helped boost direct-to-consumer sales by 4% to $544M.
A 12% surge in international revenue, driven in particular by strong returns in the Asia-Pacific and Latin America regions, also lessened the blow from a 9% drop in sales in its key North America division.
Gross margin, meanwhile, dropped by 60 basis points to 46.1%, due to higher promotional drives and foreign exchange headwinds that were partially offset by lower freight costs.
Based on the latest quarterly results, Maryland-based Under Armour backed its outlook for its 2024 fiscal year, with President and Chief Executive Officer Stephanie Linnartz saying that its international and direct-to-consumer businesses are continuing to deliver "aside a challenging consumer retail environment in North America."
Class A shares in Under Armour edged higher in premarket U.S. trading Tuesday.