Company: UAA
Filing Date: 2025-02-06
Form Type: 10-Q
Source: 0001336917-25-000016
Chunk: 82

Company: Under Armour, Inc.
Filing Date: 2025-02-06
Form: 10-Q
Item: Part I, Item 1
Chunk 82
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 decrease in net sales was due to a decrease in both wholesale and direct-to-consumer.

License Revenues

License revenues decreased by $5.2 million or 17.8%, to $23.9 million during the three months ended December 31, 2024, from $29.1 million during the three months ended December 31, 2023. This was primarily due to lower revenues from our licensing partners in North America.

License revenues decreased by $12.4 million or 15.0%, to $70.4 million during the nine months ended December 31, 2024, from $82.8 million during the nine months ended December 31, 2023. This was primarily due to lower revenues from our licensing partners in North America.

35

Gross Profit

Cost of goods sold consists primarily of product costs, inbound freight and duty costs, outbound freight costs, handling costs to make products floor-ready to customer specifications, royalty payments to endorsers based on a predetermined percentage of sales of selected products and write downs for inventory obsolescence. In general, as a percentage of net revenues, we expect cost of goods sold associated with our apparel and accessories to be lower than that of our footwear. No cost of goods sold is associated with our license revenues. 

We include outbound freight costs associated with shipping goods to customers as cost of goods sold; however, we include the majority of outbound handling costs as a component of selling, general and administrative expenses. As a result, our gross profit may not be comparable to that of other companies that include outbound handling costs in their cost of goods sold. Outbound handling costs include costs associated with preparing goods to ship to customers and certain costs to operate our distribution facilities. These costs were $20.4 million and $58.7 million for the three and nine months ended December 31, 2024, respectively (three and nine months ended December 31, 2023: $19.6 million and $58.7 million, respectively).

Gross profit decreased by $5.5 million to $665.2 million during the three months ended December 31, 2024, as compared to $670.6 million during the three months ended December 31, 2023. Gross profit as a percentage of net revenues, or gross margin, increased to 47.5% from 45.1%. This increase in gross margin of 240 basis points was primarily driven by favorable impacts of approximately 100 basis points