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$UA named Massimo Baratto as Vice President and Managing Director of its European business. He will report to Charlie Maurath, Chief Revenue Officer. Also, Kelley McCormick has been appointed as Senior Vice President of Corporate Communications, a newly created position.
As a part of the restructuring of digital business, $UA named Michael La Guardia as Senior Vice President, Digital Product. In this new role, La Guardia, a former $YHOO executive, will report to CTO Paul Fipps, who will manage the digital business. Following this move, co-founders of mobile app MyFitnessPal, plan to leave the company in Jan. 2018.
For FY17, $UA $UAA expects North America revenue to be up at high single-digit rate. Apparel and footwear revenue both are expected to grow at a low single-digit rate. DTC revenue is expected to be up at a high single-digit rate, whereas the wholesale business, is expected to be down at a low single-digit rate globally.
During 3Q17, revenue of $UA $UAA's wholesale business was down 13% to $880MM, reflecting operational challenges in the quarter, as well as lower demand in North American business, particularly within the sports specialty channel. Direct-to-consumer revenue grew 15% to $468MM and licensing business grew 16% to $34MM.
$UA $UAA slashed its outlook for FY17, mainly due to the weaker sales in North America. The company expects its revenue be up at a low single-digit percentage, compared to the previous forecast growth of 9-11%. Adj. EPS for FY17 is expected to be about $0.18-0.20, compared to prior guidance of $0.37-0.40.
Increased demand for brands like Nike and Adidas in North America, hurt $UA $UAA profit that dropped 58% during 3Q17. Net income fell to $54.2MM, or $0.12 per share, from $128.2MM, or $0.29 per share during 3Q16. Adj. EPS was $0.22. Revenue fell by 5% to $1.4Bil, first quarterly revenue decline since its IPO.
$UA $UAA expects its revenues to stay flat in 3Q17, and to increase in 4Q17. Gross margin is anticipated to be down by about 160 basis points in 2017. Adjusted gross margin, excluding restructuring charges, is forecast to drop by 120 basis points. Interest expense and other expenses are estimated to be $40MM.
$UA $UAA said it will embark on a restructuring program with the goal of streamlining operations. In fiscal 2017, the company expects to incur one-time pre-tax charges of $110-130MM related to restructuring. The majority of the charges will be accounted in 3Q17. Under Armour plans to invest more heavily in the most powerful areas of its business.
$UA has lowered its revenue growth guidance for fiscal 2017 to 9-11% from the earlier outlook of 11-12%, reflecting moderation in the North American business. EPS is forecast in the range of $0.18 to $0.21, and adjusted EPS is expected to be in the $0.37-$0.40 range. The company sees operating income between $160MM and $180MM for the year.
Apparel maker $UA slipped to a loss of $12.3MM or $0.03 per share in 2Q17 from profit of $6.3MM or $0.15 per share last year. Revenues rose 9% to $1.1Bil, with wholesale customer revenues rising 3% and direct-to-consumer revenues gaining 20%. Apparel revenue grew 11%, while footwear revenue dropped 2%. There was a 22% rise in accessories revenue.
$UA $UAA appointed Patrik Frisk as its President and COO, effective July 10. The company also announced strategic executive changes to align its organizational structure to better leverage its digital business, support its move toward category management, and drive greater operational efficiency across the organization.