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Under Armour delivered a mixed set of results for its 2023 holiday quarter after it saw slow sales in its wholesale channel and soft demand in North America.
The athletic apparel retailer cut its full-year sales outlook slightly, but said it expects its profits and gross margin to rise more than it previously did.

The interior of an Under Armour store is seen on November 03, 2021 in Houston, Texas.
Brandon Bell | Getty Images

Under Armour said Thursday that its holiday-quarter sales slowed, but its earnings beat estimates as the athletic apparel retailer worked to rein in costs.
Soft demand in North America and a slowdown in wholesale orders led revenue to drop 6% during the period, but the company posted big gains in its gross margin.

Under Armour now anticipates full-year sales will decline slightly more than it previously expected. Even so, it raised its expectations for full-year gross margin and earnings just weeks away from the end of its fiscal year.
The company’s shares were up 3% in morning trading. 
Here’s how Under Armour did in its third fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:

Earnings per share: 19 cents adjusted vs. 11 cents expected
Revenue: $1.49 billion vs. $1.50 billion expected

The company’s reported net income for the three-month period that ended Dec. 31 was $114.1 million, or 26 cents per share, compared with $121.6 million, or 27 cents per share, a year earlier. Excluding one-time items related to the sale of its MyFitnessPal platform, tax impacts and litigation reserves, Under Armour’s adjusted net income was about $84 million, or 19 cents per share. 
For the full fiscal year, which is expected to conclude at the end of March, Under Armour is projecting sales to fall by 3% to 4%, compared with its previous expectation of down 2% to 4%. Wall Street had expected sales to drop 2.8%, according to LSEG. 

The retailer is expecting to bring in earnings per share of 57 cents to 59 cents, up from a previous range of 47 cents to 51 cents. It anticipates it will post adjusted earnings per share of 50 cents to 52 cents.
Wall Street had expected earnings of 49 cents per share, according to LSEG.
During the quarter, Under Armour saw its gross margin jump by 1 percentage point to 45.2%, driven by lower freight expenses and partially offset by increased promotions and sales to off-price channels. For the full year, the company is now expecting its gross margin to be up by 1.2 to 1.3 percentage points, compared with a prior expectation of 1 to 1.25 percentage points. 
“Despite a mixed retail environment during the holiday season, our third quarter revenue results were in line with our expectations; we were able to deliver better than anticipated profitability and remain on track to achieve our full-year outlook,” Under Armour CEO Stephanie Linnartz said in a statement. “As we close out fiscal 2024 and our strengthened leadership team begins to come up to speed in the quarters ahead – we are working to reset Under Armour toward a path of improved revenue growth and enhanced value creation in the future.”
During the quarter, Under Armour’s wholesale revenue, which accounts for about 60% of sales, dropped 13% to $712 million. Partners like Dick’s Sporting Goods, Kohl’s and JD Sports pulled back on orders as they grapple with their own demand and inventory challenges. It’s a theme across the apparel sector as wholesalers looked to tighten their order books in an uncertain economy.
Like its peers, Under Armour has been working to expand its sales directly to consumers through its stores and website. During the quarter, Under Armour saw those direct sales rise 4% to $741 million, driven by a 5% uptick in store revenue and a 2% jump in digital sales.
Read the full earnings release here.
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Spirit Airlines posted another loss at the end of last year.
CEO Ted Christie said the domestic air travel market is improving.
The budget airline and JetBlue are appealing a judge’s ruling that blocked their planned merger.

A Spirit Airlines plane awaits takeoff at LaGuardia Airport in New York
Leslie Josephs/CNBC

Spirit Airlines’ fourth-quarter loss narrowed to nearly $184 million, but its CEO said that the carrier is on a path back to profitability and that the domestic air travel market is improving.
The airline is trying to find its footing after domestic fares fell, a Pratt & Whitney engine issue grounded some of its Airbus planes and a judge blocked JetBlue Airways’ planned acquisition of the carrier earlier this year. The two airlines are appealing that decision.

The failed merger has helped drive Spirit’s stock down more than 57% so far this year as investors fretted about its financial future. Spirit’s looming debt payments ahead have prompted some calls that the airline could have to restructure, or even liquidate.
On Thursday, Spirit reiterated that it “is aware of its 2025 and 2026 debt maturities and is assessing options to address those maturities when the time is appropriate.”
The budget airline has spent months looking for ways to cut costs, including adjusting its network and shifting its aircraft delivery schedule.
“The Spirit team is 100% clear and focused on the adjustments we are currently deploying and will continue to make throughout 2024 to drive us back to cash flow generation and profitability,” CEO Ted Christie said in an earnings release.
Spirit still expects to lose money in the first quarter, however, and said it projects revenue of between $1.25 billion and $1.28 billion, above analysts’ forecasts.

Here’s what Spirit reported for the fourth quarter compared with what Wall Street expected, based on average estimates compiled by LSEG, formerly known as Refinitiv:

Adjusted loss per share: $1.36 vs. an expected $1.46
Total revenue: $1.32 billion vs. an expected $1.32 billion

Spirit’s net loss of $183.65 million, or $1.68 per share, is improvement from a net loss of $270.66 million, or $2.49 per share, during the year-ago quarter. Adjusting for one-time items the carrier reported a net loss of $1.36 per share.
Revenue was down 5% to $1.32 billion.
The carrier plans for 2024 capacity to be flat to up mid single digits compared with last year, and up 1.5% in the first quarter, Spirit said.
Weaker domestic airfares have had an outsized affect on budget airlines, which largely focus on U.S. routes. Added capacity has prompted them to discount flights, especially during off-peak periods.
Spirit said fare revenue per passenger fell 25% in the fourth quarter to $48.24, while nonticket revenue per passenger, which includes Spirit’s myriad fees like seat assignments and carry-on bags, dropped 6.6% to $66.60. Passenger flight segments were up 12% in the fourth quarter from the same period of 2022.
Spirit said it expects to have an average of 25 Airbus aircraft grounded this year because of the Pratt & Whitney engine issues.
Those disruptions are expected to peak at 40 aircraft grounded in December. Spirit said expects to have 215 airplanes in its fleet by the end of the year.
The Miramar, Florida-based airline again said that talks for compensation with Pratt & Whitney, a unit of RTX, have progressed and that “while no agreement has been reached to date, the Company believes the amount of compensation it will receive will be a significant source of liquidity over the next couple of years.”
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Disney made a string of announcements meant to excite investors.
Nelson Peltz told CNBC in a statement he won’t be backing away from his proxy fight.
Disney announced its ESPN flagship streaming service will launch in August or the fall of 2025.
Disney also said Taylor Swift’s “Eras Tour” film will debut on Disney+.

Nelson Peltz, founding partner and CEO of Trian Fund Management, speaks with CNBC’s Andrew Ross Sorkin on July 17, 2013 in New York.
Heidi Gutman | CNBC, NBCU Photo Bank, NBCUniversal via Getty Images

Are you not entertained, Nelson Peltz?
Disney shares jumped 6% in after-market trading Wednesday after the company posted earnings and flooded the zone with new announcements meant not only to excite its employees and shareholders, but also to put activist investor Nelson Peltz in his place.

Peltz has launched a proxy fight against Disney, asking investors to nominate him and former Disney Chief Financial Officer Jay Rasulo to replace current board members Michael Froman and Maria Elena Lagomasino. Both Disney’s higher profits, and string of content and partnership announcements, appeared to form a direct rebuttal to Peltz’s concerns about the company.
“The last thing we need right now is to be distracted by an activist or activists that have a different agenda and don’t understand our company,” Disney Chief Executive Bob Iger told CNBC’s Julia Boorstin in an interview Wednesday.
During his company’s first-quarter earnings conference call, he added, “we have turned the corner and entered a new era.”
Peltz, who first took a stake in Disney last year only to abandon and then renew his proxy fight threats, responded with a statement to CNBC that he won’t be backing down this time.
“It’s deja vu all over again,” Peltz’s firm Trian Fund Management said in a statement. “We saw this movie last year, and we didn’t like the ending.”

It was hard to keep up with Disney’s announcements this quarter:

ESPN finally set a launch date for its direct-to-consumer service: August or fall of 2025.
Disney is buying a $1.5 billion stake in Epic Games, the maker of Fortnite. It is Disney’s “biggest foray into the gaming space ever,” Iger said to Boorstin.
Taylor Swift’s Eras Tour film is coming to Disney+.
Disney upped its dividend by 50% versus the last dividend paid in January.
Disney announced a sequel to “Moana” is coming to theaters in November, which will likely be the studio’s biggest box office hit of the year.
Disney is on track to meet or exceed its $7.5 billion targeted spending cuts by the end of fiscal 2024.
The company said it expects full-year fiscal 2024 earnings will increase at least 20% over 2023.

All of these announcements came a day after Disney made more big news, revealing it’s launching a joint venture with Warner Bros. Discovery and Fox to offer ESPN in a new skinny bundle of linear networks that caters to sports fans later this year. It will be the first time cable cord-cutters and cord-nevers will have access to ESPN outside the traditional cable bundle.
It’s only logical that the mountain of announcements came this quarter, given activist pressure from Trian and Blackwells Capital. Iger has a vested interest in beating back critics of his performance and strategy.
Peltz has been vocal about bashing Iger’s leadership as shares have slumped in the past year, underperforming the S&P 500. Trian has launched a website, Restorethemagic.com, that claims Disney has “not performed for shareholders.”
“It saddens me that the board didn’t welcome me,” Peltz said last month. “This company is just not being run properly.”
Iger said he hasn’t spoken with Peltz recently and doesn’t intend to speak with him. In a filing last month, Disney said “in deciding not to recommend Mr. Peltz, the directors considered a number of factors, including that in a two year quest for a seat on the Disney Board, Mr. Peltz had not actually presented a single strategic idea for Disney.”
WATCH: Disney CEO Bob Iger on new streaming bundle partnership: ‘I’d rather be a disruptor.’ More

ESPN will launch its flagship direct-to-consumer streaming service in the fall of 2025, Disney CEO Bob Iger said Wednesday.
The announcement comes a day after Disney said ESPN’s linear network will be available in a skinny sports bundle offering, along with networks from Warner Bros. Discovery and Fox, in a new joint venture that debuts in the fall of 2024.
ESPN didn’t announce a price for the service.

A detail view of a broadcast camera is seen with the NFL crest and ESPN Monday Night Football logo on it during a game between the Chicago Bears and the Minnesota Vikings at Soldier Field in Chicago on Dec. 20, 2021.
Icon Sportswire | Icon Sportswire | Getty Images

ESPN will launch its flagship direct-to-consumer service in either August or the fall of 2025, Disney CEO Bob Iger announced during an interview Wednesday with CNBC’s Julia Boorstin.
The service will include all of ESPN’s programming and feature new personalization and integration with ESPN’s fantasy platforms and ESPN Bet.

The date of this launch has been long anticipated by the sports media world, although the news is somewhat muted by Disney’s announcement that ESPN will be available in a new sports bundle this fall. The direct-to-consumer service would have been the first time noncable subscribers could access ESPN outside of the traditional cable bundle.
Now, the yet-to-be-named joint venture from Disney, Fox and Warner Bros. Discovery will take over that role.
It is unclear now whether TV viewers who abandoned cable will agree to pay a premium for either sports offering, neither of which include Comcast NBCUniversal and Paramount Global’s live sports games.
ESPN didn’t announce a price for the flagship direct-to-consumer service. Disney already has a sports streaming service in ESPN+, which ended the quarter with 25.2 million subscribers, down from 26 million a quarter ago. ESPN+ only has some of ESPN’s content and doesn’t include the network’s most popular live sports, including the full suite of Monday Night Football.

In the CNBC interview, Iger downplayed the prospect of the joint streaming service cannibalizing the ESPN product. He said the two platforms would offer different features to sports fans.

The ESPN offering “will have many more features and provide a much more immersive experience for the sports fan than this bundle has,” he said. “This bundle is really a channel bundle.”
Disney is attempting to transform the ESPN business, which has suffered as traditional cable bleeds subscribers. The company has considered finding a strategic partner for the network, and has held preliminary talks with the NFL, NBA and MLB about potential agreements, CNBC previously reported.Don’t miss these stories from CNBC PRO: More

Taylor Swift’s filmed Eras Tour has found a home on Disney+.
The concert film will arrive March 15.
Five additional songs will be included in “Taylor’s Version” of the film.

Taylor Swift performs during opening night of her The Eras Tour at Soldier Field in Chicago on June 2, 2023.
Chicago Tribune |Getty

…Ready for it?
Taylor Swift’s filmed Eras Tour has found a home on Disney+. The concert film will arrive on the platform on March 15, Disney CEO Bob Iger announced during the company’s earnings call Wednesday.

“Taylor’s Version” of the film will exclusively be available on the streaming service as part of its subscription. Disney noted this version will feature the concert in its entirety as well as have five additional songs not from the original theatrical or digital release, including “Cardigan.”
Iger called Swift a “creative genius” and “a true cultural phenomenon” during the call.
Financial terms of the licensing deal were not immediately available. Disney likely faced a bidding war for the pop star’s latest filmed concert, following the blowout popularity of her tour.
Swift has previously worked with Apple Music, Netflix and Disney to release filmed versions of her concerts and documentary projects.
Swift shocked the theatrical world last year when she announced she was bringing a concert film to cinemas in partnership with theater chain AMC. The film opened to more than $92 million in ticket sales during its domestic opening weekend, the second-highest debut of a film released in October.

In the excitement, movie theaters designed specialty popcorn buckets, crafted boutique cocktails and even set up friendship bracelet-making tables for Swift fans, recreating a staple experience of attending the live concerts.
In total, Swift’s film generated more than $180 million at the domestic box office and more than $261.6 million worldwide. That global figure beats the previous record Michael Jackson’s concert documentary “This Is It” secured in 2009.
The concert film shifted to on-demand availability on Dec. 13, the singer’s 34th birthday, with a rental fee of $19.89, the year she was born. There is currently no data available on the revenue digital rentals have generated.Don’t miss these stories from CNBC PRO: More