(AOF) – American equipment supplier, Under Armor posted a net profit in the first quarter of 2023/2024 to 8.5 million dollars, against 7.7 million dollars a year earlier, thanks to a reduction in its costs. However, the group saw its turnover for this quarter drop by 2%, to 1.3 billion dollars, including a decline of 9% in North America. Its gross margin fell by 60 basis points to 46.1%, under the effect of greater use of promotional offers. Operating income was $21 million versus $34.4 million a year ago.
On the outlook for 2023/2024, Under Armor is aiming for operating profit to reach $310 to $330 million, annual revenue stable or even slightly increasing, and gross margin expected to increase by 25 to 75 points. compared to 44.9% the previous year.
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Concerns remain
According to the Federation of Specialized Trade, Procos, in October 2022, activity fell by 1.5% over one year. Nevertheless, the beauty and health (+ 5.2%) and specialized food (+ 3.5%) activity is dynamic compared to October 2021. The frequentation of the points of sale was very impacted by the problems of fuel and bad weather. Compared to October 2019, the pre-covid year, the drop in attendance is very sharp (-20.9% in October). Shopping centers and the outskirts are more impacted than city centers with a difference of four to five points.
Several reasons for concern exist for the future. The players are experiencing a very significant scissor effect given the increase in their operating costs while the evolution of demand is very uncertain. Very few brands can pass on the increase in their costs to their selling prices. The federation therefore asks, among other things, to limit the indexation of the Commercial Rent Index to + 3.5% for the rents of all companies in 2023. It also invokes an absolute urgency: to cap the price of energy for 2023 and retroact on the contracts already signed to prevent the rate of failures from accelerating.