Under Armour has cut its profit outlook for fiscal year 2023 as it expects promotional activity to eat into its profit margins.
The company is anticipating a surplus of inventory in the year’s second half arising from supply chain delays, order cancellations, and consumers holding back on making purchases.
The company is now projecting its operating income to be in the $300 million to $325 million range, down from its previous estimates of $375 million to $400 million. However, sales are still expected to rise by 5% to 7%.
In Q1, the company saw its operating income reach $34 million. Overall sales remained flat compared to last year at $1.3 billion.
“We delivered our quarter, are holding our full-year revenue outlook, and remain bullish on our brand strength while we navigate the current environment,” said Under Armour’s interim President and CEO, Colin Browne.
“Moving forward, we are digging in to amplify the strengths of our core strategy while creating additional opportunities for athletes to wear UA throughout their day,” he added. “I have full confidence in the exceptional capabilities of our global team to deliver more pronounced growth and profitability over the long term.”
Looking ahead, the company is counting on the launch of its new footwear platform, which it expects to be a gamechanger in the athletic wear landscape.