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Under Armour narrows losses by $17m

Under Armour has cut its operating losses by $17m (£13.2m) year on year for the three months to 31 December, exceeding analysts’ expectations.

The US sportswear brand posted an operating loss of $10m (£7.8m) in its results for the fourth quarter – compared with a $37m (£28m) loss for the same period in 2017.

Revenue was up 2% to $1.4bn (£1.1bn) and gross margin increased 160 basis points to 45%, driven by product cost improvements.

For the full year, operating losses were cut by $3m (£2.3m) to $25m (£19.4m), and revenue was up 4% to $5.2bn (£4bn) for the year to 31 December. 

North America revenue fell by 2% to $3.7bn (£2.9bn) for the year. However, international revenue climbed by 23% to $1.3bn (£1bn) and now represents 26% of total revenue.

The brand is in the midst of a “multi-year transformation” and reported restructuring charges of $183m (£142m) for the year.

It expects revenue to increase by 3% to 4% in 2019, and operating income is predicted to reach $210m (£163m) to $230m (£178m).

Under Armour chairman and chief executive Kevin Plank said: “Our 2018 results demonstrate significant progress against our multi-year transformation toward becoming an even stronger brand and more operationally excellent company.

“As we look ahead to 2019, our accelerated innovation agenda, disciplined go-to-market process and powerful consumer-centric approach gives us increasingly greater confidence in our ability to deliver for Under Armour athletes, customers and shareholders.”

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