Q3 2023 Under Armour Inc Earnings Call

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Speaker 1: The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 11.

Jayson lower Johan during Q&A, you can dial star one one.

[music].

Yeah.

Good day and welcome to the under Armour Q3, 'twenty three earnings conference call. At this time, all participants are listen only mode.

Good day and welcome to the under Armor Q3 23 earnings conference call. At this time, all participants are listen only mode. After the speaker' presentation, there'll be a question-andanswer session and injections will be given at that time. As a reminder, this call may be recorded. I would like to turn the call over to LAN laga, Senior Vice President, rest Relations and corporate development.

Operator: Good day, and welcome to the Under Armour Q3 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session, and instructions will be given at that time. As a reminder, this call may be recorded. I would now like to turn the call over to Lance Allega, Senior Vice President, Investor Relations and Corporate Development. You may begin.

After the Speakers' presentation there'll be a question and answer session and instructions will be given at that time as a reminder, this call maybe recorded I would now.

I'd like to turn the call over to Lance Omega Senior Vice President Investor Relations and corporate development you may begin.

You may begin.

Speaker 2: development.

Good morning, and welcome to our third quarter fiscal 2023 earnings call that today's event is being recorded.

Morning welcome to our third quarter of fiscal 2020 three.

Lance Allega: Good morning, and welcome to Under Armour's third quarter fiscal 2023 earnings conference call. Today's event is being recorded for replay. Joining us on today's call will be Under Armour's Executive Chair and Brand Chief, Kevin Plank; and our President and CEO, Colin Browne; and CFO, Dave Bergman. Our remarks today includes forward-looking statements that reflect Under Armour's management's current view and certain forecast elements of our business as of February 8, 2023. Statements made are subject to risks and uncertainties detailed in the documents regularly filed with the SEC including our annual report on Form 10-K and our quarterly reports on Form 10-Q. Today's discussion also includes use of non-GAAP references. Under Armour believes these measures provide investors with a helpful perspective on underlying business trends. These measures are reconciled to the most comparable US GAAP measures, a reconciliation of which along with other pertinent information can be found in this morning's press release and at aboutunderarmour.com. With that, I'll turn the call over to Kevin.

S conce fall, today's events being accorded to.

Speaker 4: conference call. Today's event is being recorded.

Joining us on today's call beyond rummer Executive Chairman branches ke play and our President and CEO , column round and Co.

Speaker 4: Joining us on today's call will be Under Armour Executive Chair and Branch Chief Kevin White, Interim President and CEO Colin Brown, and CFO ,

Joining us on today's call.

Executive Chair.

And our president and CEO and CFO .

perment our marks today include forward-looking statements that reflect on arm 's.

Speaker 3: Our remarks today include four looking statements that reflect on our members' memory.

Our remarks today include forward looking statements.

And this current view of certain forecast elements of our business.

Speaker 4: management's current view of certain forecast elements of our business as a February

Management's current view of certain forecasts elements of our business that's in February .

As of February eighth 20, 20.

February eight 2023.

Speaker 4: rence Jackson drinking.

three statements made or subject to risks and.

Statements made are subject to risks and other uncertainties detailed in the documents regularly filed with that.

Uncertainties. Details of the documents regularly filed with the se C, including.

Speaker 3: uncertainties, details of the documents regularly filed with the SEC including

A report of Form 10-K and our quarterly reports on Form 10.

Speaker 3: report on Form 10-K and our quarterly reports on Form 10-

Right.

Okay, and our quarterly reports on Form 10-Q, today's discussion also includes non-GAAP.

Today's discussion also includes use and non-GAAP references.

Speaker 4: Today's discussion also includes use of non-GAAP .

anarably, these measures provide investors.

Speaker 3: references. I don't believe these measures provide investors with...

I don't believe these measures provide investors with the help of a perspective on the underlying.

Helpful perfective on underlying.

Speaker 3: Helpful perfective on underlying the.

Ds. These measures are reconciled.

Uh huh.

Speaker 4: These measures are reconciled. comparable US GAAP measures, a reconciliation of which along with other pertinent information can be found on this morning's press release and at about 100 hours. With that, I'll turn the call over to Kevin.

These measures are reconciled to the most comparable U S. GAAP measures a reconciliation.

Most comparable U us GAAP measures are reconciling.

Speaker 4: comparable US GAAP measures, a reconciliation of which along with other pertinent information can be found on this morning's press release and at about 100 hours. With that, I'll turn the call over to Kevin.

Which along with other permanent information.

Speaker 4: along with other pertinent information can be found on this morning's press release and at about 100 hours. With that, I'll turn the call over to Kevin.

Further information can be found in this morning's press release and under armour.

Can be found this MOR press release and at about under our mergenpose.

With that, I'll turn the call over to Tim.

Speaker 3: With that, I'll turn the call over to Kevin.

With that I'll turn the call over to Kevin.

Okay.

Thank you Lance, and good morning everyone.

Kevin A. Plank: Thank you, Lance, and good morning, everyone. Amid a continued dynamic environment, we're pleased to have reported solid third quarter results and are on track to deliver on our full year operational and financial goals for fiscal 2023. By continuing to learn, evolve and grow as an organization, the Under Armour brand is strong, and this is an exciting time for us. We're making progress on our strategic refinements, and as I've said before, we will not miss the opportunity to reposition and establish our sector leadership wherever we compete.

Thank you Lance and good morning, everyone.

Amid a continued dynamic environment. We're pleased to reported solid third quarter results and are on track to deliver on our full year operational and financial goals for fiscal' twenty-three and.

Speaker 5: Amid a continued dynamic environment, we're pleased to report solid third quarter results and are on track to deliver on our full year operational and financial goals for Fiscal 23. By continuing to learn, evolve, and grow as an organization, the Under Armour brand is strong. And this is an exciting time for us. We're making progress on our strategic refinements. And as I've said before, we will not miss the opportunity to reposition and establish our sector leadership wherever we compete.

Amid a continued dynamic environment. We're pleased to reported solid third quarter results and are on track to deliver on our full year operational and financial goals for fiscal 'twenty three.

By continuing to learn, evolving grows an organization. The underour brand is strong and this is an exciting time for us. We're making progress on our strategic refirements and, as I've said before, we will not miss the opportunity to reposition and establish our sector leadership wherever we compete.

Speaker 5: By continuing to learn, evolve, and grow as an organization, the Under Armour brand is strong. And this is an exciting time for us. We're making progress on our strategic refinements. And as I've said before, we will not miss the opportunity to reposition and establish our sector leadership wherever we compete.

By continuing to learn evolve and grow as an organization I know my brand is strong and this is an exciting time for us, we're making progress on our strategic refinement.

As I've said before we will not miss the opportunity to reposition and establish our sector leadership wherever we compete.

When I consider under Armour's journey, I've never been more energized and excited about the road in front, with the organization we have in place, as well as the future we are building.

Speaker 5: When I consider Under Armour's journey, I've never been more energized and excited about the road in front, with the organization we have in place, as well as the future we are building. We are certainly not standing still, building on our transformative operational improvements and continuing to evolve our strategy from a position of strength. We're working hard to amplify opportunities for our existing core business, while strengthening our long term ability to serve athletes beyond the gym, field and courts, and throughout the entirety of their day.

What I consider under armour journey.

I've never been more energized and excited about the road in front with the organization, we have in place as well as the future we are building.

Speaker 5: with the organization we have in place as well as the future we are building. We are certainly not standing still, building on our transformative operational improvements and continuing to evolve our strategy from a position of strength. We're working hard to amplify opportunities for our existing core business, while strengthening our long-term ability to serve athletes beyond the gym, field, and courts, and throughout the entirety of their day.

We are, certainly notstanding, still building on our transformative operational improvements and continuing to evolve our strategy from a position of strength.

Speaker 5: We are certainly not standing still, building on our transformative operational improvements and continuing to evolve our strategy from a position of strength. We're working hard to amplify opportunities for our existing core business, while strengthening our long-term ability to serve athletes beyond the gym, field, and courts, and throughout the entirety of their day.

We're certainly not standing still building on our transformative operational improvements and continuing to evolve our strategy from a position of strength.

We're working hard to amplify opportunities for our existing core business while strengthening our long-term ability to serve athletes beyond the gym field and courts and throughout the entirety of their day.

Speaker 5: We're working hard to amplify opportunities for our existing core business, while strengthening our long-term ability to serve athletes beyond the gym, field, and courts, and throughout the entirety of their day.

We're working hard to amplify opportunities for our existing core business, while strengthening our long term ability to serve athletes beyond the gym field in courts and throughout the entirety of their day.

At the end of this month, our strategic evolution will gain more momentum as we welcome Stephanie linararts as our new President and CEO and as a member of our Board of Directors.

Speaker 5: At the end of this month, our strategic evolution will gain more momentum as well welcome Stephanie Linnartz as our new President and CEO and as a member of our Board of Directors. Stephanie brings a wealth of experience to Under Armour after 25 years at Marriott International, the hospitality powerhouse, overseeing a portfolio of 30 iconic brands spanning 138 countries. She has a distinguished track record of executing best-in-class brand strategies and developing talent and led Marriott's multi-billion dollar digital transformation and award-winning loyalty program, expertise that will give us a critical level up in one of our most vital areas of strategic focus.

At the end of this month, our strategic evolution will gain more momentum as we welcome Stephanie Lennartz as our new President and CEO and as a member of our board of directors.

Stephanie brings a wealth of experience to under, Armour, after 25 years at Marriott international, the hospitality powerhouse, overseeing a portfolio of 30 iconic brands spending 138 countries.

Speaker 5: Stephanie brings a wealth of experience to Under Armour after 25 years at Marriott International, the hospitality powerhouse, overseeing a portfolio of 30 iconic brands spanning 138 countries. She has a distinguished track record of executing best-in-class brand strategies and developing talent. And led Marriott's multi-billion dollar digital transformation and award-winning loyalty program. expertise that will give us a critical level up in one of our most vital areas of strategic focus.

Definitely brings a wealth of experience to under armour. After 25 years at Marriott International the hospitality powerhouse overseeing a portfolio of 30 iconic brands spanning 138 countries.

She has a distinguished track record of executing best-in-class brand strategies and developing talent, and led Marriott's multibillion dollar digital transformation and award-winning loyalty program.

Speaker 5: She has a distinguished track record of executing best-in-class brand strategies and developing talent. And led Marriott's multi-billion dollar digital transformation and award-winning loyalty program. expertise that will give us a critical level up in one of our most vital areas of strategic focus.

She has a distinguished track record of executing best in class brand strategies and developing talent.

And let marriott's multibillion dollar digital transformation and award winning loyalty program.

Expertise that will give us a critical level up in one of our most vital areas of strategic focus.

Speaker 5: expertise that will give us a critical level up in one of our most vital areas of strategic focus.

Expertise that will give us a critical level up in one of our most vital areas of strategic focus.

I'm looking forward to the perspective that Stephanie will bring to the brand, leveraging our deep bench of industry experts to work in concert and unlock our full potential.

Speaker 5: I'm looking forward to the perspective that Stephanie will bring to the brand, leveraging our deep bench of industry experts to work in concert and unlock our full potential. And as Brand Chief and Executive Chair, I'm excited to support Stephanie across the business with an emphasis on our product innovation pipeline and brand storytelling. We look forward to the complement of our diverse skill sets and strengths to prioritize top and bottom line growth for UA with Stephanie's leadership as CEO.

I'm looking forward to the perspective that Stephanie will bring to the brand leveraging our deep bench of industry experts to work in concert and unlock our full potential.

And his brand chie and Executive Chair. I'm excited to support Stephanie across the business, with an emphasis on our product innovation pipeline and brand storytelling.

Speaker 5: And as Brand Chief and Executive Chair, I'm excited to support Stephanie across the business with an emphasis on our product innovation pipeline and brand storytelling. We look forward to the complement of our diverse skill sets and strengths to prioritize top and bottom line growth for UA with Stephanie's leadership as CEO .

And as Brad Chief and Executive Chair I'm excited to support Stephanie across the business with an emphasis on our product innovation pipeline and brand storytelling.

We look forward to the complement of our diverse skill sets and strength to prioritize top and bottom line growth for UA, with Stephanie's leadership as CEO .

Speaker 5: We look forward to the complement of our diverse skill sets and strengths to prioritize top and bottom line growth for UA with Stephanie's leadership as CEO .

We look forward to the complement of our diverse skill sets and strengths to prioritize top and bottom line growth for UA with Stephanie's leadership as CEO .

Further strengthening our brand, we recently announced two new board members, Carolyn Everson and Patrick Weitzel.

Further strengthening our brand, we recently announced two new board members, Carolyn Everson and Patrick White.

Speaker 5: Further strengthening our brand, we recently announced two new board members, Carolyn Everson and Patrick Whitesel.

Each brings a wealth of experience to successful careers across media technology, sports and entertainment management.

Speaker 5: Each brings a wealth of experience and successful careers across media, technology, sports and entertainment management. So fantastic new competencies to support the chapter ahead for Under Armour.

Each brings a wealth of experience and successful careers across media technology Sports and Entertainment management.

So fantastic new compferenenscies to support the chapter ahead for underarmour.

Speaker 5: So fantastic new competencies to support the chapter ahead for Under Armour.

So a fantastic new competencies to support the chapter ahead for under armour.

And as we look to this next chapter, we continue to build on our momentum as brand, delivering industry-leading innovation and premium consumer experiences, always obsessed with empowering those who strive for more in uniquely under ourmour way.

Speaker 5: And as we look to this next chapter, we continue to build on our momentum as a brand, delivering industry leading innovation and premium consumer experiences, always obsessed with empowering those who strive for more in a uniquely Under Armour way.

And as we look to this next chapter we continue to build on our momentum as the brand delivering industry, leading innovation and premium consumer experiences always obsessed with empowering those who strive for more than a uniquely under armour way.

To support this, we're making progress on the strategic refinements that we introduced on our last call, including

Speaker 5: To support this, we're making progress on the strategic refinements that we introduced on our last call including broadening our product aperture to address the nonactive moments of an athlete's day, maintaining UA performance and delivered with culturally relevant style; activating with greater precision to reach our target audience and inspirational muse of the 16 to 20-year-old varsity athlete; and advancing our segmentation strategy across the spectrum of good, better and best with a heightened focus on better and best-level product offerings.

To support this we're making progress on the strategic refinements that we introduced on our last call including <unk>.

Broadening our product aperture to address the nonactive moments of an athlette day: maintaining UA performance and delivered with culturally relevant style.

Speaker 5: broadening our product aperture to address the non-active moments of an athlete's day, maintaining UA performance and delivered with culturally relevant style. activating with greater precision to reach our target audience and inspirational muse of the 16 to 20 year old varsity athlete There. advancing our segmentation strategy across the spectrum of good, better, and best, with a heightened focus on better and best level product offerings.

Broadening our product aperture to address the non active moments of an athlete's day, maintaining your weight performance and delivered with culturally relevant style.

Activating with greater precision to reach our target audience and inspirational muse of the 16 to 20 year-yearold far city athlete.

Speaker 5: activating with greater precision to reach our target audience and inspirational muse of the 16 to 20 year old varsity athlete There. advancing our segmentation strategy across the spectrum of good, better, and best, with a heightened focus on better and best level product offerings.

Activating with greater precision to reach our target audience and inspirational Muse of the 16 to 20 year old varsity athlete.

And.

Speaker 6: There. advancing our segmentation strategy across the spectrum of good, better, and best, with a heightened focus on better and best level product offerings.

And.

Advancing our segmentation strategy across the spectrum of good, better and Beth, with a heightened focus on better and best-level product offerings.

Speaker 5: advancing our segmentation strategy across the spectrum of good, better, and best, with a heightened focus on better and best level product offerings.

Advancing our segmentation strategy across the spectrum of good better and best with a heightened focus on better and best level product offerings.

underver will build amazing product that delivers on our promise of solutions you never knew you needed and, once you've tried them, could not imagine living without.

Speaker 5: Under Armour will build amazing product that delivers on our promise of solutions you never knew you needed and, once you've tried them, could not imagine living without.

I never will build amazing product that delivers on our promise of solutions you never knew you needed and once you've tried them could not imagine living without.

As we finish out fiscal 'twenty, three and round the corner into fiscal 'twenty. Four there is much to do but let me be clear when I say that under armour is in a good place where strong and tested we've got the right people and processes working together and we're strengthening our leadership.

As we finish out fiscal 23 and around the corner of fiscal' 24, there's much to do, but let me be clear when I say that underarmour is in a good place. We're strong and tested, we've got the right people and processes working together and we're strengthening our leadership.

Speaker 5: As we finish out fiscal 2023 and round the corner into fiscal 2024, there's much to do. But let me be clear when I say that Under Armour is in a good place. We're strong and tested. We've got the right people and processes working together, and we're strengthening our leadership. We know what great looks like and we expect to make significant strategic and operational progress this year as we set up to reinvigorate growth.

We know what great looks like, and we expect to make significant strategic and operational progress this year as we set up to reinvigorate growth.

Speaker 5: We know what great looks like, and we expect to make significant strategic and operational progress this year as we set up to reinvigorate growth.

We know what great looks like and we expect to make significant strategic and operational progress. This year as we set up to reinvigorate growth.

And we're in this position.

And we're in this position.

Speaker 5: And we're in this position thanks partly to the man sitting next to me. Colin, we owe a lot to you. Thank you for your steadfast leadership of Under Armour during this interim period. As Stephanie joins, I know you'll continue to be a vital partner for her and all of us as we move forward. We're fortunate. So on behalf of our Board and Executive Leadership team, thank you and cheers.

Thanks partly to the man sitting next to me.

Speaker 5: Thanks partly to the man sitting next to me. Colin, we owe a lot to you. Thank you for your steadfast leadership of underarmour during this interim period. As Stephanie joins, I know you'll continue to be a vital partner for her in all of us as you move forward. We're fortunate. So on behalf of our board executive leadership team, thank you and cheers.

Thanks, partly to the man sitting next to me.

Colin, we owe a lot to you.

Speaker 7: Colin, we owe a lot to you. Thank you for your steadfast leadership of underarmour during this interim period. As Stephanie joins, I know you'll continue to be a vital partner for her in all of us as you move forward. We're fortunate. So on behalf of our board executive leadership team, thank you and cheers.

Colin we owe a lot to you. Thank you for your steadfast leadership of under armour. During this interim period as Stephanie joined I know you will continue to be a vital partner for her and all of US as we move forward we're fortunate.

Thank you for your steadfast leadership of underarmour during this interim period. As Stephanie joins, I know you'll continue to be a vital partner for her in all of us as you move forward. We're fortunate.

Speaker 5: Thank you for your steadfast leadership of underarmour during this interim period. As Stephanie joins, I know you'll continue to be a vital partner for her in all of us as you move forward. We're fortunate. So on behalf of our board executive leadership team, thank you and cheers.

So behalf of our Board executive leadership team, Thank you and Cheers.

Speaker 5: So on behalf of our board executive leadership team, thank you and cheers.

So on behalf of our board and executive leadership team. Thank you cheers.

In closing.

Speaker 8: In closing, as we continue to push our evolution and scale towards a more significant global presence and realize our potential, we must never lose sight of our identity in the heart of who we are. As I said, our brand is strong, and we will continue to protect this house.

In closing as.

As we continue to push our evolution in scale towards a more significant global presence and realize our potential.

Speaker 5: as we continue to push our evolution scale towards a more significant global presence and realize our potential. We must never lose sight of our identity in the heart of who we are. As I said, our brand is strong. And we will continue to protect this house.

We continue to push our evolution scale towards more significant global presence and realize our potential.

We must never lose sight of identity in the heart of who we are.

Speaker 5: We must never lose sight of our identity in the heart of who we are. As I said, our brand is strong. And we will continue to protect this house.

We must never lose sight of our identity and the heart of who we are as.

As I said, our brand is strong.

Speaker 5: As I said, our brand is strong. And we will continue to protect this house.

As I said our brand is strong.

And we will continue to protect this house.

Speaker 5: And we will continue to protect this house.

And we will continue to protect this house.

2023 marks the twentieth anniversary of this iconic phrase, which helped establish and underscore our unique identity as a core component of our brand. This concept is as raw now as it was then.

Speaker 5: 2023 marks the 20th anniversary of this iconic phrase, which helped establish and underscore our unique identity. As a core component of our brand, this concept is as raw now as it was then and, in today's dynamic world, arguably even more relevant to sport, to identity, to community. This year, we'll call this code back into action, inviting a new generation of athletes to protect this house

2023 March 20th anniversary of this iconic phrase, which helped establish and underscore our unique identity as.

As a core component of our brand. This concept is as rod now as it was then.

And in today's dynamic world, arguably even more relevant to sport, to identity, to community.

Speaker 5: And in today's dynamic world, arguably even more relevant to sport, to identity, to community. This year, we'll call this code back into action, inviting a new generation of athletes to protect this house.

And in today's dynamic world arguably even more relevant to support to identity to community.

This year we'll call this code back into action, inviting a new generation of athletes to protect this house.

Speaker 5: This year, we'll call this code back into action, inviting a new generation of athletes to protect this house.

This year, we'll call this code back into action inviting a new generation of athletes to protect this house.

This constant has been there all along and it's time to wake a giant.

Speaker 5: This constant has been there all along, and it's time to wake a giant. Time to invoke a new future. Colin?

This constant has been there all along and.

Speaker 5: And it's time to wake a giant. Time to invoke a new future. Colin?

And it's time to wake a giant.

Time to invoke a new future.

Time to invoke a new future.

Speaker 5: Time to invoke a new future. Colin?

Coen.

Speaker 9: Colin?

Owen.

Thank you Kevin, and good morning everyone. It's been a great privilege to leave under Armour during this transition and work more closely with our amazing teammates across the globe.

Colin Browne: Thank you, Kevin, and good morning, everyone. It's been a great privilege to lead Under Armour during this transition and work more closely with our amazing teammates across the globe. I look forward to partnering with Stephanie when she joins on February 27, continuing to advance our strategy as I resume my role as Chief Operating Officer. Having had the opportunity to spend some time with her, I know she is an incredible leader who will bring a breath of fresh air to our business with a keen focus on consumer centricity and digitalization as we continue driving our strategy forward.

Thank you Kevin and good morning, everyone. It's been a great privilege to lead under armour during that transition and work more closely with amazing teammates across the globe.

I look forward to partnering the Stephanie when she joins on February twenty-seventh, continuing to advance our strategy as I resume my role as Chief Operating Officer.

Speaker 10: I look forward to partnering with Stephanie when she joins on February 27th, continuing to advance our strategy as I resume my role as Chief Operating Officer. Having had the opportunity to spend some time with her, I know she is an incredible leader who will bring a breath of fresh air to our business. with a keen focus on consumer centricity and digitalization as we continue driving our strategy forward.

I look forward to partnering with Stephanie when she joined US on February 27th continuing to advance our strategy as I resumed my role as Chief operating officer.

Having had the opportunity to spend some time with her, I know she is an incredible leader who will bring a breadth of pressure to our business.

Speaker 10: Having had the opportunity to spend some time with her, I know she is an incredible leader who will bring a breath of fresh air to our business. with a keen focus on consumer centricity and digitalization as we continue driving our strategy forward.

Having had the opportunity to spend some time with her I know she has an incredible leader who will bring a breath of fresh air to our business with a keen focus on consumer Centricity and digitalization as we continue driving our strategy forward.

With a keen focus on consumer centricity and digitalization, as we continue driving our strategy forward.

Speaker 10: with a keen focus on consumer centricity and digitalization as we continue driving our strategy forward.

In the meantime, as Kevin mentioned, we are not standing still. Our purpose of empowering those for truct we strive for more is eternal. Our strategic evolution in creating the space necessary to broaden our product aperture, refining our target consumer to the 60 to 20 -year old vast athlete and more effectively segmenting our product excuseme, remains our immedate priorities.

In the meantime, as Kevin mentioned, we are not standing still our purpose of empowering those infrastructures drive the more is a tunnel.

Speaker 10: In the meantime, as Kevin mentioned, we are not standing still. Our purpose of empowering those who strive for more is eternal. Our strategic evolution in creating the space necessary to broaden our product aperture, refining our target consumer to the 16 to 20-year-old varsity athlete, and more effectively segmenting our product remains our immediate priorities. To touch on these, I'd start by underscoring that as one of only a handful of authentic performance brands worn by athletes at all levels of competition, we've earned our reputation as a trusted brand for sport. The go-to apparel, footwear and equipment that athletes never knew they needed and once they have them, can't imagine living without.

Our strategic evolution in creating the space necessary to broaden our product aperture.

Speaker 10: refining our target consumer to the 60 to 20 year old varsity athlete and more effectively segmenting our product remains our immediate priority. To touch on these, I'd start by underscoring that as one of only a handful of authentic performance brands worn by athletes at all levels of competition, we've earned our reputation as a trusted brand for sport. The go-to apparel, footwear, and equipment that athletes never knew they needed, and once they have them, can't imagine living without.

Refining our target consumer to the $60 trying to eat your own thoughts the athlete and more effectively segmenting our product excuse me remains our immediate priorities.

To touch on these. I'd start by under: sco.ring: that is one of only a handful of authentic performance brands. Worn by athletes are all levels of competition. We've earned our reputation as a trusted brand for sports, the go-to apparel, footwear and equipment that athletes never knew they needed and, once they have them, can't imagine living that.

Speaker 10: To touch on these, I'd start by underscoring that as one of only a handful of authentic performance brands worn by athletes at all levels of competition, we've earned our reputation as a trusted brand for sport. The go-to apparel, footwear, and equipment that athletes never knew they needed, and once they have them, can't imagine living without.

To touch on these <unk>.

Dumped by underscoring that was one of only a handful of authentic performance brands one by athletes at all levels of competition.

And our reputation as a trusted brand to sports the Goto apparel footwear and equipment that athletes never knew they needed and once they have them transfer mentioned living with that.

In this respect, we're doing a great job of fulfilling the train: compete and recover moments of an athlette day.

Speaker 10: In this respect, we're doing a great job of fulfilling the train, compete and recover moments of an athlete's day. That leaves the nonactive or what we call live moments of their journey, which is a significant long-term growth opportunity that triples the total addressable market for Under Armour.

In this respect we do a great job fulfilling the train compete and recover moments of an athlete state.

That leaves the non-active, or what we call, lift moments of the journey.

Speaker 10: That leaves the non-active, or what we call, live moments of their journey. which is a significant long-term growth opportunity that triples the total addressable market for underarm.

That leaves the non active or what we call lift moments of that journey.

Which is a significant long-term growth opportunity that triples the total addressable market undar.

Speaker 10: which is a significant long-term growth opportunity that triples the total addressable market for underarm.

Which is a significant long term growth opportunity that triples.

Total addressable market for unknown.

So how does this translates to a broader sports style offering where the train compete and recover stages of an athlette' journey, our performance with style product. The Li stage will be style with performance product.

Speaker 10: So how does this translate to a broader sports-style offering? Where the train, compete and recover stages of an athlete's journey are performance with style product, the live stage will be style with performance products, science wrapped in art or arts wrapped in science. Consumers will ultimately decide. It's our job to give them more choices and, therefore, more versatility to suit whatever path, their day, their outfit.

How does this translate to a broader sports style offering where the train compete and recover stages of an athlete's journey outperformance with style product.

This stage will be style with performance products science rationale or are attracting some consumers will ultimately decide.

Science rapt art or are threat in science? Consumers will ultimately decide.

Speaker 10: science wrapped in art or art wrapped in science, consumers will ultimately decide. It's our job to give them more choices and therefore more versatility to suit whatever path they are taking.

Is our job to give them more choices and therefore more versatility, to suit whatever path they're outputting.

Speaker 10: It's our job to give them more choices and therefore more versatility to suit whatever path they are taking.

Our job to give them more choices and therefore more versatility suit whatever pump that day.

Soft launched in October this type of volatility is embodied in slip speed, our unique training footwear engineered with a compatible heel switch between active and recovery mode.

stooft, launched in October. This type of versatility is embodied in subspeed, our unique training footwear engineered with a convertible heel to switch between active and recovery modes.

Speaker 10: Soft launched in October, this type of versatility is embodied in SlipSpeed, our unique training footwear engineered with a convertible heel to switch between active and recovery modes. From early reads, SlipSpeed's strong DNA also sees it slotted into the space in between moments of style and self-expression. As SlipSpeed launches globally on February 14, we're excited to bring this innovation to a much broader audience and learn even more about the possibilities of this hybrid platform. To support this, we're opening a physical manifestation of our brand positioning with a pop-up store in the Flatiron District in Manhattan, which will showcase SlipSpeed and our newest apparel offering in a new format with less product density and enhanced storytelling.

From early reads: slip speeds. Strong DNA also sees that slotted into this space in between moments of style and self-expression.

Speaker 10: From early reads, Slip Speed's strong DNA also sees it slotted into the space in between moments of style and self-expression. As FlipSpeed launches globally on February the 14th, we're excited to bring this innovation to a much broader audience and learn even more about the possibilities of this hybrid platform. To support this, we're opening a physical manifestation of our brand positioning with a pop-up store in the Flatiron district in Manhattan, which will showcase Slipspeed and our newest apparel offering in a new format with less product density and enhanced storytelling.

From early reads slip speed strong DNA also seated slotted into the space in between moments of style and self expression.

As slipspeed launches globally on February fourteenth. We're excited to bring this innovation to a much broader audience and learn even more about the possibilities of this hybrid platform.

Speaker 10: As FlipSpeed launches globally on February the 14th, we're excited to bring this innovation to a much broader audience and learn even more about the possibilities of this hybrid platform. To support this, we're opening a physical manifestation of our brand positioning with a pop-up store in the Flatiron district in Manhattan, which will showcase Slipspeed and our newest apparel offering in a new format with less product density and enhanced storytelling.

I've split speed launches globally on February the 14th we're excited to bring this innovation to a much broader audience and learn even more about the possibilities of hybrid platform to <unk>.

To support this, we're opening a physical manifestation of our brand positioning with a pop-up store in the F line district in Manhattan, which will showcase this speed and our newest apparel offering in a new format with less product density and enhanced storytelling.

Speaker 10: To support this, we're opening a physical manifestation of our brand positioning with a pop-up store in the Flatiron district in Manhattan, which will showcase Slipspeed and our newest apparel offering in a new format with less product density and enhanced storytelling.

To put this opening a physical manifestation of our brand positioning with a pop up store in the Flatiron district in Manhattan, which will showcase the speed and our newest apparel offering and a new format with less product density and enhanced storytelling.

Of course, none of this happens overnight.

Speaker 10: Of course, none of this happens overnight. Still, you will see immediate progress and points on the board as we're reimagining some of our spring summer 2023 floor sets with enhanced merchandising and storytelling to showcase how Under Armour can be worn away from training and competition. In Apparel, we've got the new structured wovens coming and introducing more variation of our Unstoppable men's and women's bottoms to hit broader wearing occasions. We're also leveraging our leadership in performance tees and in the latest sports bra. And with programs like our new women Meridian bottoms, which have significantly improved anti-pilling component, it's the only legging you'll ever need for style, performance and comfort.

Of course, none of this happens overnight still you will see immediate progress and points on the board as we re imagining some of our spring summer 2003 floor sets with enhanced merchandising and storytelling to showcase how under armour can be one away from training and competition.

Still, you will see immediate progress and points on the board as we reimagining some of our Spring-Summer 23 floor sets with enhanced merchandising and storytelling to showcase how Under Armour can be worn away from training and competition.

Speaker 10: Still, you will see immediate progress and points on the board as we reimagining some of our Spring-Summer 23 floor sets with enhanced merchandising and storytelling to showcase how Under Armour can be worn away from training and competition. In apparel, we've got the new structured wovens coming and introducing more variation of our unstoppable men's and women's bottoms to hit broader wearing occasions. We're also leveraging our leadership in performance tees and in the later sports products. and with programs like our new women's meridian bottoms, which have significantly improved anti-pilling components. It's the only legging you'll ever need for style, performance and comfort.

In apparel, we've got the new structured wovens coming and introducing more variation of our unstoppable men's and women's bottoms to hit broader wearing occasions.

Speaker 10: In apparel, we've got the new structured wovens coming and introducing more variation of our unstoppable men's and women's bottoms to hit broader wearing occasions. We're also leveraging our leadership in performance tees and in the later sports products. and with programs like our new women's meridian bottoms, which have significantly improved anti-pilling components. It's the only legging you'll ever need for style, performance and comfort.

In apparel, we've got the new structured woven is coming and introducing more variation about unstoppable mens and womens bottoms to hit broader wearing occasions. We're also leveraging our leadership in performance Tees and then the latest sports products.

We're also leveraging our leadership in performance teas and in the latest sports bran.

Speaker 10: We're also leveraging our leadership in performance tees and in the later sports products. and with programs like our new women's meridian bottoms, which have significantly improved anti-pilling components. It's the only legging you'll ever need for style, performance and comfort.

And with programs like our new women's Meridian bottoms, which have significantly improved anti-pilling ponent, it's the only leggging you'll ever need for style performance, encumbass.

Speaker 10: and with programs like our new women's meridian bottoms, which have significantly improved anti-pilling components. It's the only legging you'll ever need for style, performance and comfort.

And with programs like our new women's Meridian bottoms, which have significantly improved anti pilling component.

Speaker 10: It's the only legging you'll ever need for style, performance and comfort.

Only the legging, you'll ever need for style performance and comfort.

In footwear, the near term pipeline includes putting our youngest paint on funds from one Gemini and forge and this fall you'll see even more stores five launches, including dynamic outfitting new silhouette can you calibrate maybe.

In footwear, the near-turn pipeline includes putting a younger spin on Phantom 1, Gemini, and Forge. And this fall, you'll see even more sports-style launches, including dynamic outfitting, new silhouettes, and new colorways, and maybe even a footwear collaboration or two.

Speaker 10: In Footwear, the near-term pipeline includes putting a younger spin on Phantom 1, Gemini and Forge. And this fall, you will see even more sport style launches including dynamic outfitting, new silhouettes and new colorways and maybe even a footwear collaboration or two.

Maybe even if footwear collaborations.

Transitioning to our second strategic refinance we're also evolving our marketing and Omnichannel strategies to better connect with the 16% to 20 year old pump the athletes with an always on social media activation approach, including a greater focus on unique content to amplify Brian intensity and drive cultural.

Transition to our second strategic refinement. We're also evolving our marketing and omn-ichannel strategies to better connect with the 16 to twenty-year-old by athletes.

Speaker 10: Transitioning to our second strategic refinement, we're also evolving our marketing and omni-channel strategies to better connect with the 16 to 20-year-old varsity athletes with an always on social media activation approach including a greater focus on unique content to amplify brand identity and drive cultural relevance. We're seeing early improvements in brand metrics with this demographic in the US and key international markets like Mexico and China. All this feeds into our ability to drive excellence into our omni-channel presence, particularly in ecommerce where we also started to see the early benefits of recent investments. So overall encouraging and we look forward to leaning in and applying even more in the coming seasons.

With an always-on social media activation approach, including a greater focus on unique content to amplify brand identity and drive cultural relevance.

Speaker 10: with an always-on social media activation approach, including a greater focus on unique content to amplify brand identity and drive cultural relevance. We're seeing early improvements in brand metrics with this demographic in the US and key international markets like Mexico and China. All this feeds into our ability to drive excellence into our omni-channel presence, particularly in e-commerce, where we also start to see the early benefits of recent investments. So overall, encouraging. And we look forward to leaning in and applying even more in the coming season.

We're seeing early improvements in brand metrics with this demographic in the US and key international markets like Mexico and China.

Speaker 10: We're seeing early improvements in brand metrics with this demographic in the US and key international markets like Mexico and China. All this feeds into our ability to drive excellence into our omni-channel presence, particularly in e-commerce, where we also start to see the early benefits of recent investments. So overall, encouraging. And we look forward to leaning in and applying even more in the coming season.

Yes.

We're seeing early improvements and Brian metrics with this demographic in the U S and key international markets like Mexico and China.

All this feeds into our ability to drive excellence into our omni-channel presence, particularly in e-commerce, where we also start to see the early benefits of recent investments.

All this feeds into our ability to drive excellence into our Omnichannel Omnichannel presence, particularly in E Commerce, where we're also starting to see the early benefits of recent investments.

Speaker 10: All this feeds into our ability to drive excellence into our omni-channel presence, particularly in e-commerce, where we also start to see the early benefits of recent investments. So overall, encouraging. And we look forward to leaning in and applying even more in the coming season.

So overall encouraging and we look forward to leaning in and applying even more in the coming season.

Speaker 10: So overall, encouraging. And we look forward to leaning in and applying even more in the coming season.

Overall, encouraging and we look forward to leaning in and applying even more in the coming season.

The third is the ongoing evolution of our segmentation strategy.

Speaker 10: The third is the ongoing evolution of our segmentation strategy and better balancing of the topmost parts of our product pyramid. Consumers tell us that varsity athletes tend to buy more frequently at fuller and higher price points than other groups throughout the year. In this work, we're going category-by-category, addressing what premium looks like at every price point, determining opportunities to drive additional, better and best level product assortments on what the marriage of innovation and style should look like as if we're designing unencumbered. As we continue to sharpen and hone this strategy, we'll also heighten our storytelling to drive a more pronounced premium element to young athletes.

The third is the ongoing evolution of our segments patient strategy.

And better balancing of the topmost parts of our product pyramid. Consumers tell us that vast athletes tend to buy more frequently at fuller and higher price points than other groups throughout the year.

Speaker 10: and better balancing of the topmost parts of our product pyramid. Consumers tell us that varsity athletes tend to buy more frequently at fuller and higher price points than other groups throughout the year. In this work, we're going category by category, addressing what Premium looks like at every price point. determining opportunities to drive additional, better, and best level product assortment. on what the marriage of innovation and style should look like as if we're designing an incumbent. As we continue to sharpen and hone this strategy, we'll also heighten our storytelling to drive a more pronounced premium element to young athletes.

Better balancing of the top most parts of our product pyramid consumers tell us the varsity athlete tend to buy more frequently.

Price points than other groups throughout the year.

In this work we're doing category by category, grow category by category, addressing what premium looks like at every ICE price point, determining opportunities to drive additional, better and best-level product assortment.

Speaker 10: In this work, we're going category by category, addressing what Premium looks like at every price point. determining opportunities to drive additional, better, and best level product assortment. on what the marriage of innovation and style should look like as if we're designing an incumbent. As we continue to sharpen and hone this strategy, we'll also heighten our storytelling to drive a more pronounced premium element to young athletes.

And this work we're doing category by category growing category by category addressing what premium looks like at every price point determining opportunities to drive additional better and best level product Assortments and what the marriage of innovation and style should like look like as if we're designing unencumbered as we.

Speaker 10: determining opportunities to drive additional, better, and best level product assortment. on what the marriage of innovation and style should look like as if we're designing an incumbent. As we continue to sharpen and hone this strategy, we'll also heighten our storytelling to drive a more pronounced premium element to young athletes.

Speaker 10: on what the marriage of innovation and style should look like as if we're designing an incumbent. As we continue to sharpen and hone this strategy, we'll also heighten our storytelling to drive a more pronounced premium element to young athletes.

on what the marriage of innovation and style should look like as if we are designing an incumbent.

As we continue to sharpen and home. This strategy will also heighten our storytelling. To drive a more pronounced premium element: athletes.

Speaker 10: As we continue to sharpen and hone this strategy, we'll also heighten our storytelling to drive a more pronounced premium element to young athletes.

We continue to shop and home. This strategy will also heightened our storytelling to drive a more pronounced premium elements young athletes.

And speaking of driving greater influence our incredible roster of athletes continue to inspire us all from Sharon locate the winning her debut at the New York City Marathon Julio Rodriguez, winning the MLP American League rookie of the year Award to Justin Jefferson breaking the Minnesota Vikings franchise single season.

And speaking of driving greater influence, our incredible roster of athletes continue to inspire us all, from Sharon lockd winning herd debut at the New York City marathon, Jo Julio rodriguezs winning the MLB American League rookie of the year award to Justin jefferson breaking Minnesota bikings franchise single season receiving record and Jordan speed winning the match alongside Justin Thomas.

Speaker 10: And speaking of driving greater influence, our incredible roster of athletes continue to inspire us all from Sharon Lokedi winning her debut at the New York City Marathon to Julio Rodriguez winning the MLB American League Rookie of the Year award, to Justin Jefferson breaking the Minnesota Vikings franchise single season receiving record, and Jordan Spieth winning The Match alongside Justin Thomas, Under Armour continues to stand out, delivering performance and helping to empower athletes at the highest level of sports.

Receiving record and Jordan speed, winning the match alongside Justin Thomas.

Under armmored, continues to stand out delivering performance and helping to empower athletes at the higher level of sports.

Speaker 10: Under Armour continues to stand out, delivering performance and helping to empower athletes at the highest level with sports.

Under armour continues to standout delivering performance and helping to empower athletes at the highest level of support.

And with 2023 in its early days, there's more in store for UA as we look forward to the second half of the NBA season for Stephen courage and joelanbad, and in partnership with danni garsia and D the Rock Johnson, we launch as the official uniform supplier of the exlss inaugural season on February , the eighteenth.

Speaker 10: And with 2023 in its early days, there's more in store for UA as we look forward to the second half of the NBA season. For Stephen Curry and Joel Embiid and in partnership with Danny Garcia and Dwayne "The Rock" Johnson, we launch as the official uniform supplier of the XFL's inaugural season on February the 18th. So UA's brand momentum remains strong.

And with 2023 and it's early days, there's more in store for UA as we look forward to the second half of the NBA season, with Stephen Curry and Joel Embiid in in partnership with Danny Garcia and Dwayne The rock Johnson, we launch as the official uniform supply of the <unk> inaugural season on February the 18th.

Speaker 10: for Stephen Curry and Joe Lambide. And in partnership with Danny Garcia and Dwayne The Rock Johnson, we launch as the official uniform supplier of the XFL's inaugural season on February 18. So UA's brand momentum remains strong.

So UA's brand momentum remains strong.

Speaker 10: So UA's brand momentum remains strong.

<unk> brand momentum remained strong.

So back to our third quarter performance.

Speaker 10: But back to our third quarter performance, we delivered a solid quarter with revenue up 3% to $1.6 billion, or up 7% on a currency neutral basis. Clicking down into the results by region, North America declined by 2%, coming in at just over $1 billion for the quarter with wholesale down 6% and 1% growth in DTC driven by strength in our e-commerce business, partially offset by our retail stores. Though we continue to see solid demand in our largest region, we were more promotional during the quarter to manage inventory against this challenging retail backdrop. Despite the dynamic retail environment, we continued to focus on elevating the consumer experience across channels while driving operational excellence.

But back to our third quarter performance we.

We delivered a solid quarter with revenue up 3% to one point six billion or up 7% on a currency neutral basis.

Speaker 10: we delivered a solid quarter with revenue up 3% to $1.6 billion, or up 7% on a currency neutral basis. clicking down into the results by region, North America declined by 2%. coming in at just over 1 billion for the quarter with wholesale down 6% and 1% growth in DTC driven by strength in our ecommerce business. partially offset by retail stores. Though we continue to see solid demand in our largest region, we were more promotional during the quarter to manage inventory against this challenging retail backdrop. Despite the dynamic retail environment, we continue to focus on elevating the consumer experience across channels while driving operational excellence.

We delivered a solid quarter with revenue up 3% to $1 6 billion or up 7% on a currency neutral basis.

Clicking down into the results by region, North America declined by 2% coming in at just over $1 billion for the quarter with wholesale down, 6% and 1% growth in DTC driven by strength in our e-commerce business, partially offset by recovery tail stores.

Clicking down into the results by region. North America declined by toing.

Speaker 10: clicking down into the results by region, North America declined by 2%. coming in at just over 1 billion for the quarter with wholesale down 6% and 1% growth in DTC driven by strength in our ecommerce business. partially offset by retail stores. Though we continue to see solid demand in our largest region, we were more promotional during the quarter to manage inventory against this challenging retail backdrop. Despite the dynamic retail environment, we continue to focus on elevating the consumer experience across channels while driving operational excellence.

Coming in adjust over one billion for the quarter, with wholesale down 6% and 1% growth in DTC, driven by strength in our e-commerce business.

Speaker 10: coming in at just over 1 billion for the quarter with wholesale down 6% and 1% growth in DTC driven by strength in our ecommerce business. partially offset by retail stores. Though we continue to see solid demand in our largest region, we were more promotional during the quarter to manage inventory against this challenging retail backdrop. Despite the dynamic retail environment, we continue to focus on elevating the consumer experience across channels while driving operational excellence.

Partially offset by recovery tail stores.

Speaker 10: partially offset by retail stores. Though we continue to see solid demand in our largest region, we were more promotional during the quarter to manage inventory against this challenging retail backdrop. Despite the dynamic retail environment, we continue to focus on elevating the consumer experience across channels while driving operational excellence.

Though we continue to see solid demand in our largest region, we were more promotional during the quarter to manage inventory against this challenging retail backdrop.

Speaker 10: Though we continue to see solid demand in our largest region, we were more promotional during the quarter to manage inventory against this challenging retail backdrop. Despite the dynamic retail environment, we continue to focus on elevating the consumer experience across channels while driving operational excellence.

So we continue to see solid demand in our largest region, we were more promotional during the quarter to manage inventory against challenging retail backdrop.

Despite the dynamic retail environment, we continue to focus on elevating the consumer experience across channels, while driving operational excellence.

Speaker 10: Despite the dynamic retail environment, we continue to focus on elevating the consumer experience across channels while driving operational excellence.

Despite the dynamic retail environment, we continue to focus on elevating the consumer experience across channels, while driving operational excellence.

EMEA was a standout again this quarter with revenue up 32% $265 million or 46% on a currency neutral basis.

Emea was a standout again for us this quarter, with revenue up 32% - 265 million, or 46% on a currency-neutral basis.

Speaker 10: EMEA was a standout again for us this quarter with revenue up 32%, $265 million, or 46% on a currency-neutral basis. This growth was driven by solid sell-through across wholesale and DTC, along with earlier-than-planned shipments. We are encouraged by our momentum in EMEA and intend to remain nimble, given the continued marketplace uncertainty in building inventories.

This growth was driven by a solid sell-through across wholesale and DTC.

Speaker 10: This growth was driven by solid sell-through across wholesale and DTC. along with earlier than planned shipments. We are encouraged by our momentum in EMEA and intend to remain nimble given the continued marketplace uncertainty and building inventory.

This growth was driven by solid sell through across wholesale and DTC.

along with earlier than planned shipments. We are encouraged by our momentum in EMEA and intend to remain nimble given the continued marketplace uncertainty and building inventory.

Speaker 10: along with earlier than planned shipments. We are encouraged by our momentum in EMEA and intend to remain nimble given the continued marketplace uncertainty and building inventory.

Long with earlier than planned shipments, we are encouraged by our momentum and yet EMEA and intend to remain nimble.

Given the continued marketplace uncertainty and building inventory.

APAC revenue was down 9% to $198 million or up 1% on a currency neutral basis.

Speaker 10: APAC revenue was down 9% to $198 million, or up 1% on a currency-neutral basis. Despite ongoing COVID challenges, impacting retail traffic and store labor availability, particularly in China, we grew our wholesale business during the quarter. In addition, outside of China, we saw positive momentum in our e-commerce business. And finally, our Latin American business was up 45% to $64 million in the quarter, or up 41% on a currency-neutral basis.

APAC revenue was down 9% to $198 million or up 1% on a currency neutral basis.

despite ongoing COVID challenges impacting retail traffic and store labor availability.

Speaker 10: despite ongoing COVID challenges impacting retail traffic and store labor availability. particularly in China, we grew our wholesale business during the quarter. In addition, outside of China, we saw positive momentum in our e-commerce business. And finally, our Latin American business was up 45%. to $64 million in the quarter or up 41% on a currency neutral basis.

Spite ongoing COVID-19 challenges impacting retail traffic in store.

Availability, particularly in China, we grew our wholesale business during the quarter. In addition outside of China, We saw positive momentum in our E Commerce business.

Particularly in China. We grew our wholesale business during the quarter. In addition, outside of China, we saw positive momentum in our e-commerce business.

Speaker 10: particularly in China, we grew our wholesale business during the quarter. In addition, outside of China, we saw positive momentum in our e-commerce business. And finally, our Latin American business was up 45%. to $64 million in the quarter or up 41% on a currency neutral basis.

Speaker 10: In addition, outside of China, we saw positive momentum in our e-commerce business. And finally, our Latin American business was up 45%. to $64 million in the quarter or up 41% on a currency neutral basis.

And finally, our Latin American business was up 45%.

Speaker 10: And finally, our Latin American business was up 45%. to $64 million in the quarter or up 41% on a currency neutral basis.

And finally, our Latin American business was up 45% to $64 million in the quarter or up 41% on a currency neutral basis.

To 64 million in the quarter, or up 41% on a currency neutral basis.

Speaker 10: to $64 million in the quarter or up 41% on a currency neutral basis.

Turning to operations, we continue to see improvements across our supply chain with our factory partners, making progress in returning to pre pandemic production efficiency.

Turning to operations, we continue to see improvements across our supply chain, with our facantory partners making progress in returning to prepandemic production efficiency.

Speaker 10: Turning to operations, we continue to see improvements across our supply chain with our factory partners making progress in returning to pre-pandemic production efficiency. And ocean and delivery times continued to improve, which contributed to significant tailwinds from less air and ocean freight during the third quarter, a trend we expect to continue into our fourth quarter. 

and ocean and delivery times continue to improve, which contributed to significant tailwinds from less an ocean trade during the third quarter.

Speaker 10: and ocean and delivery times continue to improve, which contributed to significant tailwinds from less an ocean parade during the third quarter. a trend we expect to continue into our fourth quarter.

Ocean and delivery times continue to improve which contributed to significant tailwind from less air and ocean freight during the third quarter.

a trend we expect to continue into our fourth quarter.

Speaker 10: a trend we expect to continue into our fourth quarter.

A trend we expect to continue throughout fourth quarter.

From an inventory perspective, levels continued to be elevated across our sector.

Speaker 10: From an inventory perspective, levels continued to be elevated across our sector. At the end of the third quarter, our inventory was up 50% to $1.2 billion. As a reminder though, our inventory was quite lean in fiscal 2021 due to our constrained strategy and supply chain disruptions. So a large part of this increase and increase over the next few quarters is simply normalizing to levels to us being a close to a $6 billion brand. At the end of fiscal 2023, we expect a similar growth rate, about 50%. But again, to contextualize this, this growth rate is off an $800 million base from the prior year, which was similar to 2015, when we were a $4 billion business.

From an inventory perspective levels continue to be elevated across our sector.

At the end of the third quarter our inventory was up 50% to one point two billion. As a reminder though, our inventory was quiet lyan in fiscal' 21 due ask due to our constrained strategy and supply chain disruptions. So a large part of this increase and the increase of an next three quarters, is simply normalizing to levels to us being at close to a $6 billion brand.

Speaker 10: At the end of the third quarter, our inventory was up 50% to $1.2 billion. As a reminder, though, our inventory was quite lean in fiscal 2021 due to our constrained strategy and supply chain disruptions. So a large part of this increase and the increase of the next few quarters is simply normalizing to levels to us being close to a six... At the end of fiscal 23, we expect a similar growth rate, about 50%, but again, to contextualize this. This growth rate is up an 800 million base from the prior year, which was similar. 2015 when we were a $4 billion business.

At the end of the third quarter, our inventory was up 50% to $1 2 billion. As a reminder, though our inventory was quite lean and fiscal 'twenty. One two off due to a constrained strategy and supply chain disruptions. So a large part of this increase and increase over the next few quarters, it's simply normalizing to levels to us being a close to.

Our $6 billion Brian .

At the end of fiscal' 23 we expect a similar growth rate, about 50%. That again, to contextualize this, this growth rate is off an eight million stagus from the prior year, which was similar.

Speaker 10: At the end of fiscal 23, we expect a similar growth rate, about 50%, but again, to contextualize this. This growth rate is up an 800 million base from the prior year, which was similar. 2015 when we were a $4 billion business.

At the end of fiscal 'twenty, three we expect a similar growth rate about 50%, but again to protect your life base. This growth rate is off 800 million from the prior year, which was similar to 2015, when we were a $4 billion business.

Speaker 10: This growth rate is up an 800 million base from the prior year, which was similar. 2015 when we were a $4 billion business.

2015 when we were a $4 billion.

Speaker 10: 2015 when we were a $4 billion business.

We do expect our year-end inventory growth to. We do expect our year-end inventory growth rate to be the peak.

Speaker 10: We do expect our year-end inventory growth rate to be the peak, followed by elevated yet appropriate step-downs in the following quarters. That said, we continue to feel confident about where we are relative to our plans and managing this aspect of our business. To this point, we expect inventory to stay around three turns as we work through these challenging environments.

We do expect our year end inventory growth.

We do expect our year end inventory growth rate to be the peak followed by elevated yet appropriate step downs in the following quarters.

Followed by elevated yet appropriate step downs in the following quarters.

Speaker 10: followed by elevated, yet appropriate, step-downs in the following quarters. That said, we continue to feel confident about where we are relative to our plans and managing this aspect of our business. At this point, we expect inventory to stay around three turns as we work through this challenging environment.

That said, we continue to feel confident about where we are relative to our plans and managing this aspect of our business.

Speaker 10: That said, we continue to feel confident about where we are relative to our plans and managing this aspect of our business. At this point, we expect inventory to stay around three turns as we work through this challenging environment.

That said, we continue to feel confident about where we are relative to our plans and managing this aspect of our business.

To this point, we expect inventory to stay around three turns as we work through this challenging environment.

Speaker 10: At this point, we expect inventory to stay around three turns as we work through this challenging environment.

At this point, we expect inventory to stay around three tons as we work through this challenging environment.

In closing, as I transition back to the cheap operating role, I want to say how proud I am.

Speaker 10: In closing, as I transition back to the chief operating role, I want to say how proud I am to be part of Under Armour. It's been an honor and a privilege to lead this iconic brand. Over the last nine months, I have worked with our amazing global teammates and now have a much broader understanding of our business, which will help me support Stephanie as she steps into her role. I'll now hand it over to Dave.

In closing as I transition back to the Chief operating ROE I want to say, how proud I am to be part of under armour.

To be part of drama.

Speaker 10: To be part of drama. It's been an honour and a privilege to lead this iconic brand. Over the last nine months I have worked with our amazing global teammates and now have a much broader understanding of our business, which will help me support Stephanie. as she steps into her row. I'll now hand it over to Dave.

It's been an honor and a privilege to leadave this iconic brand.

Speaker 10: It's been an honour and a privilege to lead this iconic brand. Over the last nine months I have worked with our amazing global teammates and now have a much broader understanding of our business, which will help me support Stephanie. as she steps into her row. I'll now hand it over to Dave.

Been an honor and a privilege to lead this iconic brand.

Over the last nine months, I have worked with our amazing global teammates and now have a much broader understanding of our business, which will help me support Stephanie as she steps into her rO. I'll now hand it over to date.

Speaker 10: Over the last nine months I have worked with our amazing global teammates and now have a much broader understanding of our business, which will help me support Stephanie. as she steps into her row. I'll now hand it over to Dave.

Over the last nine months I have worked with our amazing global team mates and now have a much broader understanding of our business, which will help me support Stephanie as she steps into hero.

Speaker 10: as she steps into her row. I'll now hand it over to Dave.

Now I'll hand, it over to Dave.

Thanks GAN, and good morning everyone.

Dave Bergman: Thanks, Colin, and good morning, everyone. With three-quarters of our fiscal 2023 behind us, we delivered a solid quarter and are on track to deliver our full year financial and operational goals. As a reminder, due to our fiscal year change, our third quarter of fiscal 2023, ending December 31, is comparable to the fourth quarter of fiscal 2021. As mentioned earlier, our third quarter revenue was up 3% to $1.6 billion, or up 7% on a currency-neutral basis.

Thanks, Colin and good morning, everyone with three quarters of our fiscal 2023 behind US we delivered a solid quarter and are on track to deliver our full year financial and operational goals.

With three quarters of our fiscal 2023 behind us, we delivered a solid quarter and are on track to deliver our full year financial and operational goals.

Speaker 3: With three quarters of our fiscal 2023 behind us, we delivered a solid quarter and are on track to deliver our full year financial and operational goals. As a reminder, due to our fiscal year change, our third quarter of fiscal 2023, ending December 31st, is comparable to the fourth quarter of fiscal 2021. As mentioned earlier, our third quarter revenue was up 3% to $1.6 billion, or up 7% on a currency-neutral basis.

As a reminder, due to our fiscal year change, our third quarter of fiscal 2023 and in December thirty-first is comparable to the fourth quarter of fiscal 2021.

Speaker 3: As a reminder, due to our fiscal year change, our third quarter of fiscal 2023, ending December 31st, is comparable to the fourth quarter of fiscal 2021. As mentioned earlier, our third quarter revenue was up 3% to $1.6 billion, or up 7% on a currency-neutral basis.

As a reminder, due to our fiscal year change our third quarter of fiscal 2023 and in December 31.

Is comparable to the fourth quarter of fiscal 2021.

As mentioned earlier, our third quarter revenue was up 3% to one point six billion, or up 7% on a currency neutral basis.

Speaker 3: As mentioned earlier, our third quarter revenue was up 3% to $1.6 billion, or up 7% on a currency-neutral basis.

As mentioned earlier, our third quarter revenue was up 3% to $1 6 billion or up 7% on a currency neutral basis.

In addition to the regional comments column provided from a channel perspective, wholesale revenue was up 7% to 82 million, with increases in our full price and off-price businesses.

Speaker 3: In addition to the regional comments Colin provided, from a channel perspective, wholesale revenue was up 7% to $820 million, with increases in our full-price and off-price businesses. Direct-to-consumer revenue declined 1% to $715 million due to declines in our factory and Brand House stores, partially offset by a 7% increase in our ecommerce business. And licensing revenue decreased 19% in the quarter to $30 million, driven primarily by the timing of minimum royalty guarantees associated with our Japanese licensee.

In addition to the regional comments Colin provided from a channel perspective wholesale revenue was up 7% to $820 million with increases in our full price and off price businesses.

Direct consumer revenue declined 1% to 715 million due to declines in our factory and brand house stores, partially offset by a 7% increase in our e-commerce business.

Speaker 3: Direct consumer revenue declined 1% to $715 million due to declines in our factory and Brand House stores partially offset by a 7% increase in our ecommerce business. And licensing revenue decreased 19% in the quarter to $30 million, driven primarily by the timing of minimum royalty guarantees associated with our Japanese licensee.

Direct consumer revenue declined 1% to $715 million due to declines in our factory and brand house stores, partially offset by a 7% increase in our E Commerce business.

And licensing revenue decreased 19% in the quarter to three million, driven primarily by the timing of minimum royalty guarantees associated with our Japanese licensesee.

Speaker 3: And licensing revenue decreased 19% in the quarter to $30 million, driven primarily by the timing of minimum royalty guarantees associated with our Japanese licensee.

And licensing revenue decreased 19% in the quarter to $30 million driven primarily by the timing of minimum royalty guarantees associated with our Japanese licensee.

From a product perspective in a challenging retail environment. Our apparel business was down 2%, with strength in golf and team sports offset by softness and training.

Speaker 3: From a product perspective, in a challenging retail environment, our Apparel business was down 2% with strength in golf and team sports offset by softness in training. We also saw strength in men's and women's bottoms during the quarter, particularly the Unstoppable franchise, as well as a solid performance in outerwear. In Footwear, revenue was up 25% with positive results in all categories, benefiting from better product availability during the quarter. Footwear growth was driven by strength in run, with the HOVR Machina 3 resonating well, especially in APAC and EMEA. Team sports, particularly basketball with the Curry 10 and American football with cleated products, also performed well during the quarter. And our core run product continues to achieve solid results with Rogue, Assert and Pursuit demonstrating strength in the period.

From a product perspective, and a challenging retail environment, our apparel business was down 2% with strength in golf and team sports offset by softness in training.

We also saw strength in men's and women's bottoms during the quarter, particularly the unstoppable franchise, as well as a solid performance in outerwear.

Speaker 3: We also saw strength in men's and women's bottoms during the quarter, particularly the unstoppable franchise, as well as a solid performance in outerwear. In footwear, revenue is up 25%, with positive results in all categories benefiting from better product availability during the quarter. Footwear growth was driven by strength and run with the hover makana 3 resonating well especially in a pack in EMEA Team sports particularly basketball with the curry 10 and American football with cleated product also performed well during the quarter. And our core run product continues to achieve solid results with Rogue, Assert, and Pursuit demonstrating strength in the period.

We also saw strength in mens and womens bottoms during the quarter, particularly the unstoppable franchise as well as a solid performance in outerwear.

In footwear revenue was up 25%, with positive results in all categories, benefiting from better product availability during the quarter.

Speaker 3: In footwear, revenue is up 25%, with positive results in all categories benefiting from better product availability during the quarter. Footwear growth was driven by strength and run with the hover makana 3 resonating well especially in a pack in EMEA Team sports particularly basketball with the curry 10 and American football with cleated product also performed well during the quarter. And our core run product continues to achieve solid results with Rogue, Assert, and Pursuit demonstrating strength in the period.

And footwear revenue was up 25% with positive results in all categories benefiting from better product availability during the quarter.

Footwear growth was driven by strength in run, with the hover marckina three resonating well, especially in APAC and emmea team sports, particularly basketball, with the Curry ten.

Speaker 3: Footwear growth was driven by strength and run with the hover makana 3 resonating well especially in a pack in EMEA Team sports particularly basketball with the curry 10 and American football with cleated product also performed well during the quarter. And our core run product continues to achieve solid results with Rogue, Assert, and Pursuit demonstrating strength in the period.

But where growth was driven by strength and run with the hover market of three resonating well, especially in APAC and EMEA.

Team sports, particularly basketball with the current 10.

An American football with pleted product also performed well during the quarter.

Speaker 3: and American football with cleated product also performed well during the quarter. And our core run product continues to achieve solid results with Rogue, Assert, and Pursuit demonstrating strength in the period.

And American football with cleaner products also performed well during the quarter.

And our core run product continues to achieve solid results with Rogue, Assert, and Pursuit demonstrating strength in the period.

Speaker 3: And our core run product continues to achieve solid results with Rogue, Assert, and Pursuit demonstrating strength in the period.

And our core run product continues to achieve solid results with rogue assert and pursuit demonstrating strength in the period.

And finally, our accessories business was down 2% in the quarter due to softer sales of cold weather accessories.

Speaker 3: And finally, our Accessories business was down 2% in the quarter due to softer sales of cold weather accessories which more than offset strength in our Bags business.

And finally, our accessories business was down 2% in the quarter due to softer sales of cold weather accessories, which more than offset strength in our bags business.

which more than all set strength in our bags business.

Speaker 3: which more than all set strength in our bags business.

Gross margin was down 650 basis points during the third quarter, driven by 400 basis points of negative impacts from higher promotions and discounting.

Gross margin was down 650 basis points during the third quarter, driven by 400 basis points of negative impacts from higher promotions and discounting.

Speaker 3: Gross margin was down 650 basis points during the third quarter driven by 400 basis points of negative impacts from higher promotions and discounting, 130 basis points of unfavorable channel impacts primarily related to higher distributor sales, 60 basis points of adverse effects from changes in foreign currency, 50 basis points of unfavorable region mix related to higher EMEA and Latin American sales, and finally, about 50 basis points of unfavorable product mix due to the strength of our Footwear business. These negative drivers were partially offset by 40 basis points of favorable supply chain impact driven by lower freight costs which more than offset product cost headwinds during the quarter.

130 basis points of unfavorable channel impacts, primarily related to higher distributed sales.

Speaker 3: 130 basis points of unfavorable channel impacts, primarily related to higher distributed sales. 60 basis points of adverse effects from changes in foreign currency. 50 basis points of unfavorable region mix related to higher EMEA and Latin American sales. And finally, about 50 basis points of unfavorable product mix due to the strength of our footwear business. These negative drivers were partially offset by 40 basis points of favorable supply chain impact driven by lower freight costs, which more than offset product cost headwinds during the quarter.

130 basis points of unfavorable channel impacts primarily related to higher distributor sales.

60 basis points of adverse effects from changes in foreign currency.

Speaker 3: 60 basis points of adverse effects from changes in foreign currency. 50 basis points of unfavorable region mix related to higher EMEA and Latin American sales. And finally, about 50 basis points of unfavorable product mix due to the strength of our footwear business. These negative drivers were partially offset by 40 basis points of favorable supply chain impact driven by lower freight costs, which more than offset product cost headwinds during the quarter.

60 basis points of adverse effects from changes in foreign currency.

50 basis points of unfavorable region mix related to higher EMEA and Latin American sales.

Speaker 3: 50 basis points of unfavorable region mix related to higher EMEA and Latin American sales. And finally, about 50 basis points of unfavorable product mix due to the strength of our footwear business. These negative drivers were partially offset by 40 basis points of favorable supply chain impact driven by lower freight costs, which more than offset product cost headwinds during the quarter.

50 basis points of unfavorable region mix related to higher EMEA and Latin American sales.

And finally, about 50 basis points of unfavorable product mix due to the strength of our footwear business.

Speaker 3: And finally, about 50 basis points of unfavorable product mix due to the strength of our footwear business. These negative drivers were partially offset by 40 basis points of favorable supply chain impact driven by lower freight costs, which more than offset product cost headwinds during the quarter.

And finally about 50 basis points of unfavorable product mix due to the strength of our footwear business.

These negative drivers were partially offset by 40 basis points of favorable supply chain impact driven by lower freight costs, which more than offset product cost headwinds during the quarter.

Speaker 3: These negative drivers were partially offset by 40 basis points of favorable supply chain impact driven by lower freight costs, which more than offset product cost headwinds during the quarter.

These negative drivers were partially offset by 40 basis points of favorable supply chain impact driven by lower freight costs, which more than offset product cost headwinds during the quarter.

Our larger-than-expected Q3 gross margin decline was primarily due to higher-than-planned markdowns within our wholesale business and increased promotional activities within our DTC business, as we managed through inventory.

Speaker 3: Our larger than expected Q3 gross margin decline was primarily due to higher than planned markdowns within our Wholesale business and increased promotional activities within our DTC business as we managed through inventory.

Our larger than expected Q3 gross margin decline was primarily due to higher than planned markdowns within our wholesale business and increased promotional activities within our DTC business as we manage through inventory.

Third quarter, SG&A expenses were down 11% to $604 million.

Third quarter, SGNA expenses were down 11% to six hundred and four million.

Speaker 3: Third quarter SG&A expenses were down 11% to $604 million. Several factors drove this decrease including lower marketing, incentive compensation and consulting expenses.

Several factors drove this decrease.

Speaker 3: Several factors drove this decrease. including lower marketing, incentive compensation, and consulting expenses.

Several factors drove this decrease including lower marketing incentive compensation and consulting expenses.

Including lower marketing incentive compensation and consulting expenses.

Speaker 3: including lower marketing, incentive compensation, and consulting expenses.

Bringing it to the bottom line operating income was $95 million coming in above our outlook of $75 million to $85 million.

Bring it to the bottom line operating income, with 95 million coming in above our outlook of 75 to eighty-five million.

Speaker 3: Bringing it to the bottom line, operating income was $95 million, coming in above our outlook of $75 million to $85 million. After tax, we realized a net income of $122 million or $0.27 of diluted earnings per share. Excluding a $45 million earn-out benefit in connection with the sale of the MyFitnessPal platform and a $2 million benefit from a tax valuation allowance release related to prior-period restructuring, adjusted net income was $76 million.

After tax we realized a net income of $122 million or 27 of diluted earnings per share.

After tax, we realized the net income of 122 million, or 27 cents of diluted earnings per share.

Speaker 3: After tax, we realized the net income of 122 million, or 27 cents of diluted earnings per share. Excluding a $45 million earnout benefit in connection with the sale of the MyFitnessPal platform and a $2 million benefit from a tax valuation allowance release related to prior period restructuring, adjusted net income with $76 million.

Excluding a 45 million earnout benefit in connection with the sale of the myfitness ple platform and a $2 million benefit from a tax valuation allowance release related to prior period, restructuring adjusted net income with seventy-six million.

Speaker 3: Excluding a $45 million earnout benefit in connection with the sale of the MyFitnessPal platform and a $2 million benefit from a tax valuation allowance release related to prior period restructuring, adjusted net income with $76 million.

Excluding a $45 million earn out benefit in connection with the sale of the my fitness Pal platform and a $2 million benefit from a tax valuation allowance release related to prior period restructuring.

Adjusted net income was $76 million.

In addition to the operating income overdrive.

Speaker 3: In addition to the operating income overdrive, more favorable FX hedging impacts within the other income and expense line, and a better than anticipated tax rate helped us to realize $0.16 of adjusted diluted earnings per share, coming in above our outlook of $0.07 to $0.09 for the quarter.

In addition to the operating income overdrive more favorable FX hedging impacts within the other income and expense line and a better than anticipated tax rate helped us to realize 16 of.

More favorable FX hedging impacts within the other income and expense line and a better than anticipated tax rate helped us to realize 16 cents of adjusted diluted earnings per share coming in above our outlook of 7 to 9 cents for the quarter.

Speaker 3: More favorable FX hedging impacts within the other income and expense line and a better than anticipated tax rate helped us to realize 16 cents of adjusted diluted earnings per share coming in above our outlook of 7 to 9 cents for the quarter.

Adjusted diluted earnings per share coming in above our outlook of 7% to <unk> for the quarter.

Moving to the balance sheet.

Speaker 3: Moving to the balance sheet, since Colin already took us through inventory, I'll highlight our cash and cash equivalents which was $850 million at quarter-end with no borrowings under our $1.1 billion revolving credit facility. And finally, we've repurchased an additional $75 million of Class C common stock, allowing us to retire 8.8 million previously outstanding shares. In total, under our two-year $500 million program, we have repurchased $425 million of Class C stock and retired 35 million shares to date.

Moving to the balance.

Balance sheet.

Since Colin already took us through inventory, I'll highlight our cash and cash equivalents, which was $850 million at quarter end, with no borrowings under our $1.1 billion revolving credit facility.

Speaker 3: Since Colin already took us through inventory, I'll highlight our cash and cash equivalents, which was $850 million at quarter end, with no borrowings under our $1.1 billion revolving credit facility. And finally, we've repurchased an additional $75 million of Class C common stock, allowing us to retire 8.8 million previously outstanding shares. In total, under our two-year $500 million program, we have repurchased $425 million of Class C stock and retired 35 million shares to date.

Since Colin already took us through inventory I'll highlight our cash and cash equivalents, which was $850 million at quarter end with no borrowings under our $1 $1 billion revolving credit facility.

And finally, we've repurchased an additional $75 million of Class C common stock, allowing us to retire eight point eight million previously outstanding shares.

Speaker 3: And finally, we've repurchased an additional $75 million of Class C common stock, allowing us to retire 8.8 million previously outstanding shares. In total, under our two-year $500 million program, we have repurchased $425 million of Class C stock and retired 35 million shares to date.

And finally, we've repurchased an additional $75 million of class C common stock, allowing us to retire $8 8 million previously outstanding shares in.

In total, under our two -year $5 million program we have repurchased $425 million of Class desstock and retired thir thousand-five million shares to date.

Speaker 3: In total, under our two-year $500 million program, we have repurchased $425 million of Class C stock and retired 35 million shares to date.

In total under our two year $500 million program, we have repurchased $425 million of class C stock and retired 35 million shares to date.

Next let's turn to our fiscal 'twenty three outlook.

Next.

Speaker 12: Next, let's turn to our fiscal 2023 outlook. As a reminder, the comparable period is the trailing 12-month period from April 1 of 2021 through March 31 of 2022. To start, we continue to expect revenue to be up at a low-single digit rate on a reported basis and a mid-single digit rate on a currency-neutral basis, so there is no change there.

Let's turn to our fiscal 23 outlook.

Speaker 3: Let's turn to our Fiscal 23 outlook. As a reminder, the comparable period is the trailing 12-month period from April 1st of 2021 through March 31st of 2022. To start, we continue to expect revenue to be up at a low single digit rate on a reported basis. and a mid single digit rate on a currency neutral basis. So there is no change there.

As a reminder, the comparable period is the trailing 12 -month period from April first of 2021 through March thirty-first of 2020 -two.

Speaker 3: As a reminder, the comparable period is the trailing 12-month period from April 1st of 2021 through March 31st of 2022. To start, we continue to expect revenue to be up at a low single digit rate on a reported basis. and a mid single digit rate on a currency neutral basis. So there is no change there.

As a reminder, the comparable period is the trailing 12 month period from April one of 2021 through March 31 of 2022.

To start, we continue to expect revenue to be up at a low single digit rate on a reported basis and a mid single digit rate on a currency neutral basis. So there is no change there.

Speaker 3: To start, we continue to expect revenue to be up at a low single digit rate on a reported basis. and a mid single digit rate on a currency neutral basis. So there is no change there.

To start we continue to expect revenue to be up at a low single digit rate on a reported basis and a mid single digit rate on a currency neutral basis. So there is no change there.

Speaker 3: and a mid single digit rate on a currency neutral basis. So there is no change there.

Next, due to the higher than anticipated Q3 promotional headwinds, we now expect the full year fiscal 23 gross margin decline to be at the high end of the previously provided 375 to 425 basis point range. This compares with our prior year's baseline rate of 49.6%.

Speaker 3: Next, due to the higher than anticipated Q3 promotional headwinds, we now expect the full year fiscal 2023 gross margin decline to be at the high end of the previously provided 375 basis point to 425 basis point range. This compares with our prior-year baseline rate of 49.6%. Within this decline, we expect approximately one-third of the total to be from the negative impacts of higher promotions and discounting; one-third from elevated product costs, freight expenses, and changes in foreign currency; and the remaining third is from mix impacts including channel, product and region.

Next due to the higher than anticipated Q3 promotional headwinds we now expect the full year fiscal 'twenty three gross margin decline to be at the high end of the previously provided 375 to 425 basis point range. This compares with our prior year's baseline rate of 49, 6%.

Within this decline we expect approximately one third of the total to be from the negative impacts of higher promotions and discounting.

Within this decline, we expect approximately one-third of the total to be from the negative impacts of higher promotions in discounting.

Speaker 3: Within this decline, we expect approximately one-third of the total to be from the negative impacts of higher promotions and discounting. one-third from elevated product costs, rate expenses, and changes in foreign currency, and the remaining third is from mixed impacts including channel, product, and region.

One third from elevated product costs freight expenses and changes in foreign currency.

one third from elevated product costs, freight expenses and changes in foreign currency, and the remaining third is from mix impacts, including channel product and region.

Speaker 5: one-third from elevated product costs, rate expenses, and changes in foreign currency, and the remaining third is from mixed impacts including channel, product, and region.

And the remaining third is from mix impacts, including channel product and region.

Moving down the piano.

Speaker 3: Moving down the P&L, full year SG&A should be down at a low-single digit rate versus our previous expectation of down slightly. In this respect, we remain committed to ensuring our investment dollars are optimized to areas with the highest returns while proactively identifying areas to manage expenses appropriately. Dropping this through, and in line with our previous outlook, operating income is expected to reach $270 million to $290 million. Excluding the company's litigation reserve, adjusted operating income is expected to reach $290 million to $310 million.

Moving down the P&L.

Full year, SGNA should be down at a low single-digit rate versus our previous expectation of down slightly.

Speaker 3: Full year SG&A should be down at a low single digit rate versus our previous expectation of down slightly. In this respect, we remain committed to ensuring our investment dollars are optimized to areas with the highest returns, while proactively identifying areas to manage expenses appropriately. Dropping this through and in line with our previous outlook, operating income is expected to reach $270 to $290 million. Excluding the company's litigation reserve, adjusted operating income is expected to reach $290 to $310 million.

Full year SG&A should be down at a low single digit rate versus our previous expectation of down slightly in.

In this respect, we remain committed to ensuring our investment dollars are optimized to the areas with the highest returns, while proactively identifying areas to manage expenses appropriately.

Speaker 3: In this respect, we remain committed to ensuring our investment dollars are optimized to areas with the highest returns, while proactively identifying areas to manage expenses appropriately. Dropping this through and in line with our previous outlook, operating income is expected to reach $270 to $290 million. Excluding the company's litigation reserve, adjusted operating income is expected to reach $290 to $310 million.

In this respect we remain committed to ensuring our investment dollars are optimized to the areas with the highest returns while proactively identifying areas to manage expenses appropriately.

Dropping this through, and in line with our previous outlook, operating income is expected to reach 270 to two hundred and ninety million.

Speaker 3: Dropping this through and in line with our previous outlook, operating income is expected to reach $270 to $290 million. Excluding the company's litigation reserve, adjusted operating income is expected to reach $290 to $310 million.

Dropping this through and in line with our previous outlook operating income is expected to reach $270 million to $290 million.

Excluding the company's Litigation reserve, adjusted operating income is expected to reach 290 to three hundred and ten million.

Speaker 3: Excluding the company's litigation reserve, adjusted operating income is expected to reach $290 to $310 million.

Excluding the company's litigation reserve adjusted operating income is expected to reach $290 million to $310 million.

Regarding items below operating income, recall that we have been planning for a material benefit from a valuation allowance release that we expect to realize primarily in our fourth quarter.

Speaker 5: Regarding items below operating income, recall that we have been planning for a material benefit from a valuation allowance release that we expect to realize primarily in our fourth quarter. That said, we anticipate a significantly negative adjusted tax rate or tax benefit in the fourth quarter resulting in an adjusted full year tax rate in the mid single digits. Putting it all together, diluted earnings per share is expected to be $0.71 to $0.75, which includes a $0.27 benefit related to the tax valuation allowance released. Of this $0.27 benefit, $0.15 is related to prior restructuring.

Regarding items below operating income recall that we have been planning for a material benefit from a valuation allowance release that we expect to realize primarily in our fourth quarter.

Speaker 5: Recall that we have been planning for a material benefit from a valuation allowance release that we expect to realize primarily in our fourth quarter. That said, we anticipate a significantly negative adjusted tax rate, or tax benefit, in the fourth quarter, resulting in an adjusted full year tax rate in the mid-single digits. Putting it all together, diluted earnings per share is expected to be 71 to 75 cents, which includes a 27 cent benefit related to the tax valuation allowance release. Of this 27 cent benefit, 15 cents is related to prior restructuring.

That said, we anticipate a significantly negative adjusted tax rate or tax benefit in the fourth quarter, resulting in an adjusted full year tax rate in the mid-single digits.

Speaker 3: That said, we anticipate a significantly negative adjusted tax rate, or tax benefit, in the fourth quarter, resulting in an adjusted full year tax rate in the mid-single digits. Putting it all together, diluted earnings per share is expected to be 71 to 75 cents, which includes a 27 cent benefit related to the tax valuation allowance release. Of this 27 cent benefit, 15 cents is related to prior restructuring.

As said, we anticipate a significantly negative adjusted tax rate or tax benefit in the fourth quarter, resulting in an adjusted full year tax rate in the mid single digits.

Putting it all together, diluted earnings per share is expected to be 71 to 75 cents, which includes a 27% benefit related to the tax valuation allowance release.

Speaker 3: Putting it all together, diluted earnings per share is expected to be 71 to 75 cents, which includes a 27 cent benefit related to the tax valuation allowance release. Of this 27 cent benefit, 15 cents is related to prior restructuring.

Putting it all together diluted earnings per share is expected to be 71 to 75.

Which includes a <unk> 27 benefit related to the tax valuation allowance release.

Of this 27 cents benefit 15 is related to prior restructuring.

Of this 27 cent benefit, 15 cents is related to prior restructuring.

Speaker 3: Of this 27 cent benefit, 15 cents is related to prior restructuring.

Additionally, there is an eight -cent benefit from our second year earnout on the sale of the myfitness pwell platform.

Speaker 3: Additionally, there is an $0.08 benefit from our second year earnout on the sale of the MyFitnessPal platform and a $0.04 negative impact from our litigation reserve. Excluding these net positive impacts of $0.19, we now expect adjusted diluted earnings per share to be between $0.52 and $0.56. This is higher than our previously provided range of $0.44 to $0.48 primarily due to favorable FX developments on the other income and expense line and a slightly lower tax rate.

Additionally, there is an <unk> benefit from our second year earn out on the sale of the my fitness Pal platform.

And a <unk> <unk> negative impact from our litigation reserve.

And a fore cent negative impact from our Litigation reserve.

Speaker 12: and a four cent negative impact from our litigation reserve. excluding these net positive impacts of 19 cents. we now expect adjusted diluted earnings per share to be between 52 and 56 cents. This is higher than our previously provided range of 44 to 48 cents, primarily due to favorable FX developments on the other income and expense line and a slightly lower tax rate.

Excluding these net positive impacts of 19 cents.

Speaker 12: excluding these net positive impacts of 19 cents. we now expect adjusted diluted earnings per share to be between 52 and 56 cents. This is higher than our previously provided range of 44 to 48 cents, primarily due to favorable FX developments on the other income and expense line and a slightly lower tax rate.

Excluding these net positive impacts of 19.

We now expect adjusted diluted earnings per share to be between 52 and 56 cents.

Speaker 12: we now expect adjusted diluted earnings per share to be between 52 and 56 cents. This is higher than our previously provided range of 44 to 48 cents, primarily due to favorable FX developments on the other income and expense line and a slightly lower tax rate.

We now expect adjusted diluted earnings per share to be between 52 and 56.

Speaker 12: This is higher than our previously provided range of 44 to 48 cents, primarily due to favorable FX developments on the other income and expense line and a slightly lower tax rate.

This is higher than our previously provided range of 44 to 48.

Primarily due to favorable FX developments on the other income and expense line and a slightly lower tax rate.

Before I close out.

Speaker 5: Before I closeout, even though we aren't providing a fiscal 24 outlook until our Q4 call in May, we are anticipating the macroeconomic backdrop to stay uneven in calendar 2023 with elevated sector-wide inventories that could result in ongoing promotions lasting longer than previously expected. In this respect, we are employing proactive measures to protect and ensure the health of our brand to mitigate these potential pressures as best as possible as we lay the groundwork for next year's operating plan.

Even though we aren't providing a fiscal 'twenty four outlook until our Q4 call in May we are anticipating the macroeconomic backdrop.

Hey, uneven in calendar 'twenty, three with elevated sector wide inventories that could result in ongoing promotions lasting longer than previously expected.

Speaker 12: In this respect, we are employing proactive measures to protect and ensure the health of our brand, to mitigate these potential pressures as best as possible as we lay the groundwork for next year's operating plan.

In this respect we are employing proactive measures to protect and ensure the health of our brand to mitigate these potential pressures as best as possible as we lay the groundwork for next years operating plan.

Speaker 5: So to close, I'd underscore that we are pleased with our continued momentum and remain encouraged by our evolving long-term strategy including broadening our product aperture, refined consumer focus and efforts to create a more premium consideration through improved better and best-level product. Moreover, from an operational perspective, we are confident that our refined playbook and financial discipline position us well to navigate near-term uncertainty and drive Under Armour to our next chapter of pronounced growth as we continue to protect this house.

So to close I'd underscore that we are pleased with our continued momentum and remain encouraged by our evolving long term strategy, including broadening our product aperture refined consumer focus and efforts to create a more premium consideration through improved better and best level product.

Speaker 12: Moreover, from an operational perspective, we are confident that our refined playbook and financial discipline position us well to navigate near-term uncertainty and drive Under Armour to our next chapter of pronounced growth as we continue to protect this house.

Moreover, from an operational perspective, we are confident that our refined playbook and financial discipline position us well to navigate near term uncertainty and drive under armour to our next chapter of pronounced growth as we continue to protect this house and.

Speaker 3: And with that, we've finished our prepared remarks, so I'll turn it back to the operator for Q&A. Operator?

And with that we finished our prepared remarks, so I'll turn it back to the operator for Q&A operator.

Thank you if you'd like to ask a question. Please press star one one if your question has been answered.

Operator: If you'd like to ask a question, please press star 1 1. If your question has been answered and you'd like to remove yourself in the queue, please press star 1 1 again. One moment while we compile the Q&A roster.

Yourself in the queue. Please press star one again.

While we compile the Q&A roster.

Speaker 2: Our first question comes from Matthew Boss with JPMorgan. Your line is open.

Our first question comes from Matthew Boss with Jpmorgan. Your line is open.

Matthew.

Lance Allega: Matthew, are you there? Matthew are you there?

Speaker 14: Abby there.

Abbvie there.

Operator: Matthew, if your telephone is muted, please unmute.

Matthew for your telephones immediate please on mute.

Okay.

Lance Allega: Let's go to the next one. And we'll try to pop him back in if he can re-queue.

Let's go to the next level.

Yes.

Speaker 15: Thank you.

Thank you.

Operator: Our next question comes from Jay Sole with UBS. Your line is open.

Our next question comes from Jay sole with UBS. Your line is open.

Great. Thank you. So much my question is on the comments you just made about looking into the next fiscal year.

Jay Sole: Great. Thank you so much. My question is on the comments you just made about looking into the next fiscal year. It sounds like you're seeing a little bit of a change in the environment versus what you saw three months ago. Is that more of a change in the consumer and the consumer's willingness to spend? Or is that more on the industry dynamic with still inventory pretty heavy out there and maybe some of the supply chain costs taking a little bit longer to get better than you thought? Just a little bit of – little bit more color there would be helpful. Thank you.

It sounds like Youre seeing a little bit of a change in the environment versus what you saw three months ago is that more of a consumer.

Changing the consumer and the consumers willingness to spend or is that more on the industry dynamics.

Still inventory pretty heavy out there and maybe some of the supply chain costs, taking little bit longer to get better than you thought just a little bit of a little bit more color. There would be helpful. Thank you.

Speaker 16: you

Sure Jay This is Dave I would say, it's actually a little bit of both.

Dave Bergman: Sure, Jay, this is Dave. I would say it's actually a little bit of both. You know, we definitely have seen that the promotional environment went a little bit deeper and we believe is going to go a little bit longer. And a lot of that has to do with some of the building inventories that are out there with all the brands. And that is something that all of the retailers are going to need to work through in the coming quarters.

We definitely have seen that the promotional environment.

When a little bit deeper and we believe is going to go a little bit longer and a lot of that has to do with some of the building inventories that are out there with all the brands.

And that is something that all of the retailers are going to need to work through in the coming quarters, and we are seeing that that's probably going to take a little bit longer than what we would've expected maybe 90 days back.

Speaker 3: And we are seeing that that's probably going to take a little bit longer than what we would have expected maybe 90 days back. And the consumers are out there. The traffic is reasonable. But conversion is a little bit challenged. And I think that folks are being a little bit more cautious here for a while. And so we expect that pressure to continue as we move through this calendar year for a while.

And the consumers are.

Out there the traffic is reasonable but conversion is a little bit challenged.

And I think that folks are being a little bit more cautious here for a while and so we expect that pressure to continue as we move through this calendar year for a while.

Jay Sole: Okay. And maybe a question for Kevin just on hiring Stephanie. Can you just maybe elaborate a little more on what it was about her that made her the right person to come in and lead Under Armour from here? And do you have a Super Bowl prediction for us?

Got it and maybe a question for Kevin just on hiring Stephanie can you just maybe elaborate a little bit more on what it was about her that major of the right person to come in to lead under armour from here and do you have a super Bowl predictions for us.

Colin Browne: Well, this is Colin jumping in here because Kevin's not in the room at the moment, but Stephanie, obviously, as Kevin alluded to in the script, Stephanie obviously has – is an amazing executive. We've – I've had the opportunity to spend some time with her. She obviously has had an incredibly successful career and the level of kind of insight that she will bring with regards to how we are thinking about our consumer and building relationships as a brand is something that we can undoubtedly – we can already feel in some of the early conversations with her. So, we're excited to welcome her on board and looking forward to working with her.

Well this is colin jumping in here, Kevin and Kevin is not in the room at the moment, but.

Stephanie obviously as Kevin alluded to in the script. It's definitely obviously has is an amazing executive I've had the opportunity to spend some time whether.

She obviously has had an incredibly successful career and the level of kind of inside that she will bring with regards to how we're thinking about our consumer and building relationships as a brand is.

It's something that we can undoubtedly we can already failed and some of the early conversations with that so we're excited to welcome onboard and looking forward to working with them.

Speaker 10: we can already feel in some of the early conversations with her. So we're excited to welcome her on board and looking forward to working with her.

Jay Sole: Okay. Thank you so much.

Okay. Thank you so much.

Multiple: Thank you. Thank you, Jay.

Thank you thank you Sir.

Yes.

Operator: Thank you. And our next question comes from Simeon Siegel with BMO. Your line is open.

Thank you.

Our next question comes from Simeon Siegel with BMO. Your line is open.

Thanks, Hey, guys good morning, nice job.

Simeon Avram Siegel: Thanks. Hey, guys. Good morning. Nice job. I was hoping we could talk just a little – you bet. So I wanted you to just maybe elaborate a little bit on your expectations for stores, e-com, wholesale. I'm going to throw it all at you, sorry, but like channel, product and region basically just given the improvements and the progress you're making. So as I think about DTC versus wholesale, as you look at maybe diverging trends with footwear and apparel, and then just a little of any more color if you could on what you're thinking for China and Asia, if that's possible. I know that was a lot, sorry.

I was hoping you could talk just a little you bet. So I wanted to just maybe elaborate a little bit on your expectations for stores E Com wholesale.

Throw it all out you, sorry, but like channel product and region basically just given the improvements in the progress youre, making so as we think about DTC versus wholesale as you look at maybe diverging trends with footwear and apparel and then just would love any more color. If you could on what Youre thinking for China, and Asia, Yes, Thats possible I know there was a lot.

Speaker 18: I know that was a lot, sorry.

Sorry.

Colin Browne: Yeah. I was going to say, there's a lot there, Simeon. I think, let me kind of see if I can kind of pick it apiece a little bit and David can kind of jump in. As you've seen in our results, we're showing up incredibly well in Europe, and that's something which we're really pleased with, the progress we're seeing there. And part of that is the fact that the way the brand has been able to manifest itself in Europe allows us to really demonstrate the good, better, best kind of way in which we think about the brand. And when we get that right, it's very clear that it resonates well. And so we're seeing that in Europe in spite of what is a difficult time in Europe at a macroeconomic level. Under Armour is resonating pretty well.

Yes Nathan.

There is a lot.

I think let me see if I can kind of picking up pace, a little bit and David can kind of jump in.

As you've seen in our results, we are showing up incredibly well in Europe , and that's something which.

I've been really pleased with the progress with thing there and part of that is the fact that the way the brand has been able to manifest itself in Europe allows us to really demonstrate the better the good better best kind of.

<unk>, which we think about the Brandon and when we get that right. It's very clear that it resonates well and so we're seeing that in Europe . In spite of what is a difficult time in Europe at a macroeconomic level under armour is resonating pretty well.

Speaker 10: At the same time, if you go up to China obviously we – we obviously as did everyone else were challenged in the third quarter because of the number of lockdowns we had. We had 35%, 40% of our stores closed for much of Q3. We're obviously now starting to see that open up a little bit more, and we are optimistic that we may see business continue to improve as kind of consumers come back. Obviously, that's changing the dynamic of how people are shopping a little bit. People are going to stores as opposed to more of online, so we're seeing that kind of play out.

At the same time.

We're off to China, obviously, we obviously did everyone else, but challenged in the third quarter because of the number of Lockdowns. We had we had 35, 40% of our stores closed for <unk>.

Speaker 10: And in North America, we talked about that – we talked about this a little bit already, but we are seeing a softer retail environment. But we continue to invest in building out our own DTC, and that's really a key focus for us, thinking through how do we actually talk directly to consumers. Opening the store in New York is a great example of us really starting to step into that and really think through how we can build on that. And the investments we continue to make in unlocking the power of omni-channel are all things that we feel we're well positioned to lean into over the next 12 months.

Each of Q3, we're obviously now starting to see that open up a little bit more and we are optimistic that we may see we may see business continue to improve as kind of consumers come back obviously, that's changing the dynamic of how people are shopping a little bit people going into stores as opposed to more online. So we're seeing that kind of play out and in North America, we talked about that we talked.

That puts a little bit already but we are seeing a softer retail environment, but we continue to invest in building out our own DTC and that's really a key focus for us thinking through how do we actually took directly to consumers opening the store in New York is a great example of us really starting stepping into that and really think through how we can build on that in the investments.

Speaker 10: bit already, but we are seeing a softer retail environment, but we continue to invest in building out our own DTC, and that's really a key focus for us. Thinking through how do we actually talk directly to consumers. Opening the store in New York is a great example of us really starting to step into that and really think through how we can build on that, and the investments we continue to make in unlocking the power of our...

We continue to make in unlocking the power of our Omnichannel are all things that we fail.

Speaker 10: And Dave, I'm not sure if you wanted to lean into it?

Well positioned to lean into over the next 12 months and Dave I'm not sure. If you wanted to maybe I'll just add a little bit from a lake in apparel footwear accessories perspective.

Apparel I think is down 2% in Q3, but if you think about it our first three quarters of fiscal 'twenty three we had year over year comparisons on a very favorable 21.

So a lot of folks that were in our industry in terms of demand and I think across the industry apparel was impacted with higher inventory. So as a product category. It's been more promotional activity, there, which definitely challenges the revenue growth a little bit.

Dave Bergman: Yeah. And maybe I'll just add a little bit from like an apparel, footwear, accessories perspective. Apparel I think is down 2% in Q3. But if you think about it, our first three-quarters of fiscal 2023, we had year-over-year comparisons on a very favorable 2021 for a lot of folks that were in our industry in terms of demand. And I think across the industry, Apparel was impacted with higher inventories. So as a product category, it's been more promotional activity there which definitely challenges the revenue growth a little bit. However, as we work through that, we expect that to normalize more and get back into the right growth place as we go into next year.

However, as we worked through that we expect that to normalize more and get back into the right growth place as we go into next year.

Footwear has been an excellent opportunity for us as you can see.

25% in Q3 definitely a strong area for us and one that we've always talked about as being a big opportunity now some of that is due to better product availability. If you recall with the impacts.

Speaker 3: Footwear has been an excellent opportunity for us, and as you can see growing 25% in Q3, definitely a strong area for us and one that we've always talked about as being a big opportunity. Now some of that is due to better product availability. If you recall with the impacts last year from production, a lot of that impacted Footwear even more than Apparel so comping that is a little bit helpful this quarter. But again, super exciting area for us to keep driving on as we go into next year.

Last year from production a lot of that impacted footwear, even more than apparel.

So comping that is a little bit helpful. This quarter, but again super exciting area for us to keep driving on as we go into next year.

Simeon Avram Siegel: Great. Thanks, guys. And then just one quick one. Recognizing it's relatively new for you guys seeing the ASR, any guardrails or how we should think about your approach to buybacks going forward?

Great. Thanks, guys and then just one quick one recognizing it's relatively new for you guys seeing the ASR any guardrails or how we should think about your approach to buybacks going forward.

Dave Bergman: Yeah. I mean, it's something obviously that we continually look at. There's a lot of different ways that we want to be able to utilize our cash, and a lot of it is going to be navigating the current environment and staying nimble. We still have the full revolver availability so we're very liquid as well. But we want to make sure that we can reinvest the right level in long-term growth whether it be within our systems, processes, DTC, a lot of what Colin had mentioned as well. So we will continue to assess that. No decisions are made at this point in time, but we're going to continue to look at it as we go forward.

Yes, I mean, it's something obviously that we continually look at.

There's a lot of different ways that we want to be able to utilize our cash and a lot of it is going to be navigating the current environment and staying nimble.

We still have the full revolver availability, so we're very liquid as well but.

But we want to make sure that we can reinvest at the right level in long term growth whether it be within our systems processes DTC a lot of what.

Speaker 3: A lot of what Colin had mentioned as well. So we will continue to assess that. No decisions are made at this point in time, but we're going to continue to look at it as we go forward.

Colin had mentioned as well so.

We will continue to assess that no.

No decisions are made at this point in time, but.

But we're going to continue to look at it as we go forward.

Simeon Avram Siegel: Great. Thanks a lot. Nice job and best of luck for the rest of the year.

Great. Thanks, a lot nice job and best of luck for the rest of the year.

Dave Bergman: Thank you.

Thank you.

Thank you. Our next question comes from Kate Fitzsimons with Wells Fargo. Your line is open.

Operator: Thank you. Our next question comes from Kate Fitzsimons with Wells Fargo. Your line is open.

Yes, hi.

Kate Bridget Fitzsimons: Yes, hi. I guess, looking ahead to fiscal 2024, certainly understanding that you are unwilling to guide here, but I'm curious just as you're looking at the gross margin opportunities and puts and takes as we look to the first half and the back half, just given the depressed levels that we're seeing certainly on the markdown front here.

I guess looking ahead to fiscal 'twenty four I certainly understanding that you are unwilling to guide here.

But I'm curious just as Youre looking at the gross margin opportunity and puts and takes.

As we look to the first half in the back half just given the depressed levels that we're seeing and certainly on the markdown upfront here.

Colin Browne: Well, as Dave already alluded to, it's a little early. It's only February, so we're not really giving too much. We're not calling out anything, providing any color with regards to full year 2024 at this moment in time. But we are, obviously – and we talked already about the continuing promotional environment. But at the same time, we are starting to see some of these kind of supply chain issues that were previously were driving up costs, they're starting to kind of back out again. So things like shipping and container costs and this type of stuff. So we think there is an opportunity there, but it's going to be a challenging year just because of the amount of product that's out in the market from a promotional activity point of view. So it's going to take us some time to kind of work through that. Dave, do you want to add any more color?

Well.

As David already alluded to it it's a little early its only February so we're not really giving too much.

We're not calling out anything providing any color with regards to full year 'twenty for at this moment in time, but we.

We are obviously, continuing we've talked already about the continued promotional environment, but at the same time, we are starting to see some of these kind of supply chain issues that currently previously, but driving up costs, that's starting to kind of.

To kind of back out again, so things like shipping and containment costs in this type of stuff. So we think there is an opportunity there, but I would say.

Speaker 10: So we think there is an opportunity there, but, you know, it's going to be a challenging year just because of the amount of product that's out in the market from a promotional activity point of view. So it's going to take us some time to kind of work through that. Dave, do you want to add any more color? Yeah, I mean, obviously there's a lot of different areas that we're putting in the market.

It's going to be a challenging year, just because of the amount.

That's out in the market from a promotional activity point of view, so it's going to take us some time to kind of work through that Dave do you want to add any more color. Yeah. I mean, obviously there is a lot of different areas that we're we're pushing on and we want to keep moving the ball forward, but to <unk> point. It is early.

Dave Bergman: Yeah. I mean, obviously, there's a lot of different areas that we're pushing on and we want to keep moving the ball forward. But to Colin's point, it is early. And so at this point, we're going to kind of take advantage of the next 90 days to really dig in and continue to drive forward and be ready to speak more about it at our next call.

And so at this point, we're going to kind of take advantage of the next 90 days to really dig in and continue to drive forward and be ready to speak more about it at our next call Kate I would say to you. It's not that we're not willing if you use the word unwilling I just wanted to kind of correct that we didn't do this last year as well. It was one of the reasons, we changed our fiscal year, primarily due to visibility because in February we're still barely in.

Lance Allega: Yeah, Kate. I would say, too, it's not that we're not willing. Like, you used the word unwilling. I just want to kind of correct that. We didn't do this last year as well. It's one of the reasons we changed our fiscal year, primary due to visibility, because in February we're still barely into the order book for the fall, winter seasons. So a lot of moving parts but we'll definitely, obviously, get to it in our May call, but certainly a lot of considerations as we move forward. 

The order book for the fall winter.

Season, so a lot of moving parts.

It will definitely obviously get to it in our may call, but certainly.

A lot of a lot of considerations as we move forward.

Kate Bridget Fitzsimons: Can I just ask? It's a fair point. Can I just ask one follow-up on the inventory levels? Certainly, understand that you guys are kind of shifting towards a prioritization of growth here. But with guiding the year-end inventories up 50%, you're noting greater caution just overall in the environment, maybe the consumer. I guess I'm just trying to balance opportunities on growth as well as maybe a potential return to positive gross margins next year. Again, understand kind of unwilling to talk about trajectories on gross margins next year. But I'm just trying to understand the balance there between growth and profitability as we're looking ahead, especially with some of these inventory investments.

Can I just ask.

Fair point can I, just ask one follow up on that inventory level, certainly understand that you guys are kind of shifting towards the prioritization of growth growth year, but with that in the year end inventories at 50% you are noting greater caution just o'brien the environment, maybe the consumer I guess I'm just trying to.

New balance opportunities on growth as well as maybe a potential return to positive gross margin next year again understand kind of unwilling to talk about trajectory on gross margins next year, but I'm just trying to understand the balance there between growth and profitability as we're looking ahead, especially with some of these.

Speaker 22: year again understand you know kind of unwilling to talk about trajectories on gross margins next year but I'm just trying to you know understand the balance there between you know growth and profitability if we're looking ahead especially with some of these inventories.

Inventory investment.

Right.

Speaker 21: As we already spoke a little bit about, I think we're in a somewhere different place than much of the industry. We were actually reasonably happy with where we now sit from an inventory perspective, because as we call that in the script, we were running the constrained model last year. We also walked away from some demand because we just couldn't see we'd be able to serve us through our inventory levels. We're incredibly slim.

As we've already spoken a little bit, but I think we're in a.

Somewhat of a difficult different placed in much of the industry, we're actually reasonably happy with vaping acetate from an inventory perspective.

Because as we called out in the script, we were running the constrained bottle last year. We also walked away from some demand because we just couldnt see we'd be up to services to our inventory levels were incredibly slim last year, we're now getting our inventory back to what I would call kind of a steady state kind of number which is going to that 50% increase is a big number but when you actually look at the amount of inventory.

Colin Browne: As we already spoke a little bit about, I think we're in a somewhat of a different place than much of the industry. We're actually reasonably happy with where we now sit from an inventory perspective because, as we called out in the script, we were running the constrained model last year. We also walked away from some demand because we just couldn't see we'd be able to service it. So, our inventory levels were incredibly slim last year. We're now getting our inventory back to what I would call a steady state number, which is, okay, that 50% increase is a big number. But when you look at the amount of inventory we're now holding, we're holding the right level of inventory for a $6 billion business. We're comfortable where we are from an inventory perspective. And our inventory is rightsized for the way in which we expect our business to evolve next year.

We are now holding we're holding the right level of inventory for a $6 billion business. So now we're comfortable with from an inventory perspective, and our inventory is right sized for the way in which we expect our business to kind of evolve next year.

Speaker 10: we are from an inventory perspective. And our inventory is right size for the way in which we expect our business to kind of evolve next year.

Dave Bergman: Kate, this is Dave. I think maybe what I would add a little bit there too is we have done a deep dive to see what product we have that is more seasonless that we can pack and hold over to next year as opposed to liquidating it at very low prices now. And that's part of what's assumed in our outlook as well. And so that is something that is in our inventory growth numbers now that we'll be able to draft off of a little bit next year, at least from a cash perspective. And then I think just thinking about where we are right now as kind of around a three turn, to Colin's point, is a pretty healthy spot for us. And as we move through next year and deal with any of the excess, we still will be managing our third-party liquidation in a reasonable spot.

This is Dave I think maybe what I would add a little bit there too is we have done a deep dive to kind of see what product. We have that is more seasonal list that we can pack and hold over to next year as opposed to liquidating. It at very low prices now and that's part of what's assumed in our in our outlook as well and so.

That is something that is in our our inventory growth numbers now that will be able to draft off of a little bit next year at least from a cash perspective.

Speaker 12: We would expect to stay kind of in that 3% to 5% range, hopefully at the lower end of that, which is what we have been doing and continue to do to make sure that that we're keeping the brand healthy out there and leveraging our outlet stores as best as we can. So we feel really good about that. And to Colin's point, the growth rate looks high. But if you look at the actual health of the inventory and you look at our actual turns, we're actually in a reasonable spot, and we're ready to drive into next year.

And then I think.

Just thinking about where we are right now is a kind of around the three turn to Collins point is a pretty healthy spot for us and as we move through next year and deal with any of the excess we still will be managing our third party liquidation in a reasonable spot correct. We would expect to stay kind of in that 3% to 5% range hopefully at the <unk>.

Our end of that which is what we've been doing and continue to do to make sure that we're keeping the brand healthy out there leveraging our outlet stores as best as we can so we feel really good about that.

Speaker 12: So we feel really good about that and you know to Collins point the growth rate looks high But if you look at the actual health of the inventory and you look at our actual terms We're actually in a reasonable spot and we're ready to drive into next year

<unk> point the growth rate looks high but if you look at the actual health of the inventory and you look at our actual turns were actually in a reasonable spot and were ready to drive into next year.

Kate Bridget Fitzsimons: Great. Best of luck for spring season. Thanks so much.

Great Best of luck for spring season, Thanks, so much.

Thank you.

David Bergman: Thank you.

Operator: Thank you. Our next question comes from Bob Drbul with Guggenheim. Your line is open.

Thank you. Our next question comes from Bob <unk> with Guggenheim. Your line is open.

Hi, good morning.

Bob Drbul: Hi. Good morning. Just a question on the marketing and the focus on the 16 to 20-year-old varsity athletes. You talk about just some of the early improvements in the metrics for this demographic. I was wondering if you could share a few of those with us. And then I think the other question is just, on this year, where are you going to end up the marketing levels or the rate of marketing spend this year? And just trying to understand that as it relates to more of a longer term perspective on how much you're going to invest. Thanks.

Just a question on.

The marketing and the focus on the 16% to 20 year old varsity athletes you talk about.

Just some of the early improvements in the metrics for this demographic I was wondering if you could share a few of those with US and then the other question is just where on this year, where you're going to end up the marketing like levels or the rate of marketing spend this year I'm just trying to understand that as it relates to more of a longer term perspective.

Speaker 18: and just trying to understand that as it relates to more of a longer term perspective on how much you're going to invest. Thanks.

How much youre going to invest.

Yes.

Colin Browne: Yeah. And thanks for the question, Bob. Yeah. As you mentioned, we have shifted our target audience to this 16 to 20-year-old varsity athlete. And I want to stress that that's the target audience. That's not the target market. This is the inspirational muse that we're looking to work with and build relationships with, which would allow us to amplify the brand as part of our broader strategic evolution.

For the question Bob.

Yes, as you mentioned.

<unk> shifted our target audience to the 16 to 20 year old varsity athlete and I want to stress that that's the target audience that is not the target market. This is the inspirational means that we are looking to kind of work with them and build relationships with which would allow us to amplify the brand.

As part of our broader strategic evolution.

Speaker 10: Early days yet. We really only made that shift in the back end of last year. So we're starting to look at the marketing metrics around that, and it looks as if the work we're doing and we're starting to see the results certainly from the point of view of how we've been selling in things like our cleated footwear landing incredibly well. Some of our team sports work is landing incredibly well. So a lot of the work we're now starting to do and the way we started to think about focusing our marketing to ensure that we're meeting that athlete is really starting to resonate. And we're seeing that show through in some of our results as well.

Yes early days here, we really only made that shift.

The back end of last year so.

We're starting to look at that.

<unk>.

The marketing metrics around that and it looks as if the work we're doing and we're starting to see the results certainly from the point of view of how we have been selling in things like our creative or landing incredibly well some of our team sports work as lending incredibly well. So a lot of the work. We are now starting to do and the way we start to think about it focusing our marketing to ensure that we're meeting the athlete is really starting to <unk>.

Speaker 10: Some of our team sportswork is landinginredbly well, So a lot of the workwere startto do in the way we're start to think about focusing our marketing to ensure that we're eting thatathlete is really starting to resateand we're seeing that kind of show through in some of our results as well. From the, from the point of view of our marketing is still, you know it's focused on middle top finunal activations and you know again, continue to be focused on on increasing awareness, engagement and consideration, as we would do, and you know this.

And we're seeing that kind of show through in some of our results as well.

The point of view of our marketing is still.

It's focused on middle to top of funnel Activations and again continue to be focused on increasing awareness engagement and consideration as we were.

Would do.

Speaker 10: From the point of view of our marketing, it's still – it's focused on middle to top funnel activations. And again, continue to be focused on increasing awareness, engagement, and consideration as we would do. And SlipSpeed is a great example of how we're looking to lean into that when it comes to that other part of our strategic evolution with what we call our live, our sports style stuff. So overall we feel as if we've got a great story to tell, and this 16 to 20-year-old athlete is the individual we want to tell it to. But, Dave, do you want to give some clarity around numbers?

This set.

<unk> is a great example of US how we're looking to lean into that when it comes to the other part of our strategic evolution, what we call a live sports style stuff. So overall, we feel as if we were moving we've got a great story to tell in the 16 to 20 round athlete as the individuals we want to tell it to you, but Dave do you want to give some clarity.

Just from a dollar perspective, we finished Q3, a little below 11% of marketing dollars to revenue and.

Dave Bergman: Yeah. Bob, this is Dave. Just from a dollars perspective, we finished Q3 a little below 11% of marketing dollars to revenue, and we're still managing through that operating objective of keeping marketing kind of in that 10% to 11% of revenue. And that's how we're going to keep driving forward. And then we'll talk more about next year as we get to the May call.

Speaker 12: And we're still managing through that operating objective of keeping marketing kind of in that 10 to 11% of revenue. And that's how we're going to keep driving forward. And then we'll talk more about next year as we get to the May call.

We're still.

Managing through that operating objective of keeping marketing kind of in that 10% to 11% of revenue and that's how we're going to keep driving forward.

And then we'll talk more about next year as we get to the May call great. Thank you very much.

Bob Drbul: Great. Thank you very much.

Thanks, Bob Thanks Bill.

Multiple: Thanks, Bob. Thank you

Operator: Thank you. Our next question comes from Brian Nagel with Oppenheimer & Co. Your line is open.

Thank you. Our next question comes from Brian Nagel with Oppenheimer <unk> Company. Your line is open.

Brian Nagel: Hi. Good morning. Thanks for taking my questions. So the first question I guess is a bit philosophical, just to understand better what you're seeing out there as far as just the overall backdrop. So it sounds – the comments you made today sounds like – sound – suggest, at least to me, that maybe in your view the backdrop has gotten a bit worse from a demand perspective. So the question I have there is, as you think about how the consumer is behaving, how the consumer is reacting to the Under Armour brand, but at the same time you and others are in this clearance activity to sort of, say, rationalize excess inventories, are those still two distinct events? Is the consumer potentially weakening here at the same time you're strategically clearing inventory? Or is that clearance activity now either leading to consumer weakness or fuelling consumer weakness?

Hi, good morning, Thanks for taking my questions.

Speaker 4: So the first question...

So the first question I.

Speaker 26: I guess there's a bit of philosophical. I mean just understand better with you know what what you're seeing out there as far as as your overall backdrop So you know it sound the comments you made today sound like sound suggests at least to me that you know maybe In your view the backdrop has gotten you know a bit worse murder

I guess, just a bit of a philosophical view.

To understand better what youre seeing out there as far as the overall backdrop. So you're it sounds the comments you made today it sounds like it sounds suggest to me that maybe.

Your view the backdrop has gotten a bit worse demand perspective. So the question I have there is as you think about.

Speaker 4: So the question I have there is you think about how the consumers behave and how the consumers are reacting to the Under Armour brand. But at the same time you and others are in this clearance activity to rationalize. excess inventories. Are those still two distinct events? I mean, is the consumer potentially weakening here at the same time you're strategically clearing inventory, or is that clearance activity now either... leading to consumer weakness or fueling consumer weakness.

How the consumers' behavior in how the consumers reacting to the under armour brand, but at the same time, you and others and these this clearance clearance activity to sort of say rationalize.

Speaker 4: excess inventories. Are those still two distinct events? I mean, is the consumer potentially weakening here at the same time you're strategically clearing inventory, or is that clearance activity now either... leading to consumer weakness or fueling consumer weakness.

Excess inventories.

Speaker 4: Are those still two distinct events? I mean, is the consumer potentially weakening here at the same time you're strategically clearing inventory, or is that clearance activity now either... leading to consumer weakness or fueling consumer weakness.

Are those still two distinct events.

As the consumer potentially weakening here at the same time, you're strategically cleared clearing inventory or is that that that clearance activity now either.

Leading to consumer weakness, we're fueling consumer weakness.

Speaker 4: leading to consumer weakness or fueling consumer weakness.

Yes, I think that from our perspective.

Dave Bergman: Yeah. I think that from our perspective we're not necessarily seeing it as a developing consumer weakness. I think, it's more a little bit of a math situation. A lot of the brands had produced a lot more inventory for 2022 thinking it was going to be as strong as 2021, not realizing how big of a bounce-back banner year 2021 was for most of the brands. And so with all of the heavy inventory out there, it's really a math equation of being able to move through it.

We're not necessarily seeing it as a developing consumer weakness I think it's more a little bit of a mass situation a lot of the brands had produced a lot more inventory for 2022 thinking it was going to be as strong as 'twenty, one not realizing how big of a bounce back banner year 2021 was for most of the brands and so.

Speaker 3: I think it's more a little bit of a math situation. You know, a lot of the brands had produced a lot more inventory for 2022, thinking it was going to be as strong as 2021, not realizing how big of a bounce back banner year 2021 was for most of the brands. And so with all that heavy inventory out there, it's really a math equation of

With all that heavy inventory out there, it's really a math equation of being able to move through it and so you see a lot of the brands have been heavily discounting and we've had to play in that a little bit more than we wanted to in Q3 and now we're starting to protect a little bit more in Q4 here as we drive through.

Speaker 3: And so you see a lot of the brands have been heavily discounting, and we've had to play in that a little bit more than we wanted to in Q3. And now we're starting to protect a little bit more in Q4 here as we drive through. But I don't necessarily see it as a demand issue. I see it more as a situation with the numbers that are out there. And as we go further through this calendar year, that will – we believe that, that will start to subside, but it is going to take longer than what we expected probably 90 days back. And then the other pressure that we saw more in Q3 was relative to China as well with COVID. Now, a very resilient consumer in China, so we're starting to see that bounce back a little bit which is great, and we hopefully will continue to see that.

But I don't I don't necessarily see it as a demand issue I see it more as.

Our situation with the numbers that are out there and as we go further through this calendar year that will we believe that that will start to subside, but it is going to take longer than what we expected probably 90 days back.

And then the other pressure that we saw more in Q3 was relative to China as well with Covid.

Speaker 3: was relative to China as well with COVID. Now, very resilient consumer in China, so we're starting to see that, you know, bounce back a little bit, which is great.

Now very resilient consumer in China. So we're starting to see that bounce back a little bit which is great and we hopefully will continue to see that.

Speaker 3: But that's kind of what we're seeing out there, and we're going to keep driving forward. But I think the first half of our coming fiscal year will be a little bit more pressured than we expected 90 days back.

But that's kind of what we're seeing out there and we're going to keep driving forward, but I think the first half of our coming fiscal year will be a little bit more pressure than we expected 90 days back yes, let me just jump in there the way I have been kind of explaining it.

It's the <unk>.

Inventories are bloated and it's in it's pretty stagnant out there at this moment in time. So it's just going to take time for it to kind of work through.

Colin Browne: Yeah. And let me just jump in there. The way I've been kind of explaining it, the inventories are bloated, and it's pretty stagnant out there at this moment in time. So it's just going to take time for it to kind of work through. I think the consumer is still there, and we're confident that certainly the categories we're in and our business can certainly continue to win within this environment, but we do think, in some respects actually, this actually gives us the right time to actually lean into the strategic work that we've already got in flight.

I think the consumer is still there.

And we are confident that suddenly.

Categories, where we're in and our business.

Suddenly continue to win within this environment, but we do think in some respects actually this this actually gives us the right time to actually lean into the strategic work that we've already got in flight, we've already talked about the 16 to 20 roadmap. The athletes how do we build that product how do we stop building that relationship so.

Speaker 10: build that product, how do we start building that relationship? So this actually gives us a great time to do that. How do we start to bring, live and sports styles in the market? Again, great time for us to do that as the industry works through the inventories. And third thing, you know, our strategic segmentation, thinking about how we continuing to build a good, better and best product. And how do we actually really start to bring that, that better and best product to the consumers? So, yeah, I understand it's bloated and it's stagnated. So, yeah, I understand it's a great time to build a good, better and best product to the consumers.

This actually gives us a great time to do that how do we start to bring live and sports titles in the market again, great time for us to do that as the inventory as the as the industry works through the inventories and furthering our strategic segmentation thinking about how we.

Continuing to build best.

Good better and best product and how do we actually really start to bring that better and best product to the consumer so yes, I understand it's bloated and stacking them at that but actually from our point of view of how we can now start to play in this market, we can position ourselves incredibly well. So as this starts to play out we can power out of it.

Speaker 10: So, yes. I understand it's bloated and it's stagnant out there. But actually, from the point of view of how we can start to play in this market, we can position ourselves incredibly well. So, as this starts to play out, we can power out of it.

That's very helpful and the second question.

Brian Nagel: That's very helpful. And the second question, a follow-up. And recognizing you haven't given guidance beyond the current fiscal year, but lots of moving parts right now with respect to top line across geographies, across product categories, distribution channels, et cetera. Longer-term, as we're watching this business and watching this business continue to recover, how should we think about what should be kind of a healthy top line growth rates for Under Armour?

Speaker 4: A follow up, you know, and recognizing you haven't given guidance beyond the current fiscal year. Lots of moving parts right now with respect to top line or across geographies, across product categories. channels, etc. Longer term, as we're watching this business and watching this business continue. to recover. How should we think about what should be kind of a healthy, top-line, growth-rich friend or upper?

Recognizing you haven't given guidance beyond the current fiscal year, but lots of moving parts right now with respect to topline or across geographies across product categories distribution channels et cetera.

Speaker 4: Lots of moving parts right now with respect to top line or across geographies, across product categories. channels, etc. Longer term, as we're watching this business and watching this business continue. to recover. How should we think about what should be kind of a healthy, top-line, growth-rich friend or upper?

Speaker 4: channels, etc. Longer term, as we're watching this business and watching this business continue. to recover. How should we think about what should be kind of a healthy, top-line, growth-rich friend or upper?

Water.

It was we're watching this business and watching the business continue to recover how should we think about what should be kind of a healthy top line growth rates for under armour.

Speaker 4: to recover. How should we think about what should be kind of a healthy, top-line, growth-rich friend or upper?

Brian This is Dave.

Dave Bergman: Brian, this is Dave. Great question, and we're excited – as excited or if not more to talk about the future. I think when you step back, we probably would go back to what continued to be some of the biggest opportunities for us. When you think about the Footwear growth and the continued potential there and how small our Footwear business is in total to our mix, when you step back and look at where we are from an international perspective and being able to return to healthier growth in Asia-Pacific as we get past COVID more, EMEA is a very healthy market for us, and we're driving forward there as well. So, still a lot of great opportunities for us as we think about internationally.

Great question and we.

We're excited as excited if not more to talk about the future.

I think when you step back we.

Probably would go back to what continue to be some of the biggest opportunities for us.

When you think about the footwear growth and the continued potential there and how small our footwear businesses in total to our mix when.

Speaker 12: when you step back and look at where we are from an international perspective, and being able to return to healthier growth in Asia Pacific as we get past COVID more. EMEA is a very healthy market for us and we're driving forward there as well. So still a lot of great opportunities for us as we think about internationally. And then from a DTC perspective, it is an area that we've been over indexing on relative to investment there, whether it be within the platform itself, whether it be within our loyalty, CRM, etc. And you see that coming through in the Econ growth.

When you step back and look at where we are from an international perspective.

Being able to return to healthier growth in Asia Pacific as we get past Covid more.

<unk> is a very healthy market for us and we're driving forward there as well.

So still a lot of great opportunities for us.

As we think about internationally.

And then from a DTC perspective, it is an area that we've been over indexing on relative to investment there whether it be within the platform itself, whether it would be within our loyalty CRM et cetera, So and you see that coming through in the E comm growth.

Speaker 3: And then from a DTC perspective, it is an area that we've been over indexing on relative to investment there, whether it be within the platform itself, whether it be within our loyalty, CRM, et cetera. So, and you see that coming through in the e-com growth. So, there's a lot of things to be excited about.

There's a lot of things to be excited about also we continue to make progress relative to how we wanted to tack full priced brand house stores.

And then on top of all of that we have a new opportunity as far as expanding the aperture and going into that fourth quadrant for us are the lib quadrant or sports style project, which we're super excited about and that has a little bit of a longer lead time, youll see some of that product coming into the market, but as far as bigger dollars and bigger volume.

Speaker 3: Also, we continue to make progress relative to how we want to attack full price Brand House stores. And then, on top of all of that, we have a new opportunity as far as expanding the aperture and going into that fourth quadrant for us or the live quadrant, our sportstyle product, which we're super excited about. And that has a little bit of a longer lead time. You'll see some of that product coming into the market, but as far as bigger dollars and bigger volume, that's going to be a little bit more of a fiscal 2025 and beyond. So when you think long term, to your question, there's a lot of great opportunities out there. But as far as giving color on growth rates and things like that, we're going to hold back for now until we can get more further down the road.

That's going to be a little bit more of a fiscal 'twenty five and beyond so when you think long term to your question.

Theres a lot of great opportunities out there.

But as far as giving color on growth rates and things like that we're going to hold back for now until we can get more get more further down the road.

Brian Nagel: Got it. Very helpful. Thank you.

Got it very helpful. Thank you.

Yeah.

Operator: Thank you. Our next question comes from Jim Duffy with Stifel. Your line is open.

Thank you. Our next question comes from Jim Duffy with Stifel. Your line is open.

Thanks. Good morning, Thank you for taking my questions.

Jim Duffy: Thanks. Good morning. Thank you for taking my questions. So, I'm interested in really more about go-to-market strategies behind efforts to expand the wearable occasion for the brand. First, can you speak about the allocation of marketing dollars to that effort versus the more sport or activity-oriented dimensions of the brand? And secondly, can you speak about how you leverage partner athletes to raise awareness for the new product dimension? And then finally, and I'm particularly curious here, can you speak to the buy-in of wholesale channel partners? Are there examples of commitment to point-of-sale representation for that product?

I'm interested in learning more about go to market strategies behind efforts to expand the wearable occasion for the brand.

First can you speak about the allocation of marketing dollars that effort.

Versus the more order activity.

Dimensions of the brand and secondly can you speak about how you leverage partner athletes to raise awareness for the new product dimension and then finally.

Speaker 27: And then finally, and I'm particularly curious here, can you speak to the buy-in of wholesale channel partners? Are there examples of commitment to point of sale representation for that product?

Particularly curious here can you speak to the volume of wholesale channel partners are there examples of commitment to a point of sale representation for that product.

Hey, Jim Yeah, Let me, let me kind of lean on it but let me kind of kicked that off obviously just thinking through how we how we think about this new segment. The lift which is again just to remind you that this is kind of the fourth quartile of train compete recover live.

Colin Browne: Hi, Jim. Yeah. Let me kind of lean on – let me kind of kick that off. Obviously, just thinking through how we think about this new segment, the Live, which is, again, just to remind you, this is kind of the fourth quartile of train, compete, recover, live. And building a little bit off the previous question, this changes our total addressable market enormously. So, it's a huge opportunity for us to lean into that.

Building a little bit off the previous question. This changes our total addressable market enormous states. So it's a huge opportunity for us telling them into that we are building currently building. This thing so our go to market model at this moment in time and understanding how we can optimize what we currently have.

Speaker 21: We're currently building this into our go-to-market model at this moment in time and understanding how we can optimize what we currently have in addition to how do we then think about bringing it to market differently. And all of that's working in flight at this moment in time. But the store that we're opening in New York is perhaps a great manifestation of how the brand wants to show up differently and intends to show up differently, and the teams are working through that, and you'll see more of that come to life over the next few quarters.

In addition to how do we then think about bringing it to market differently and all of that is working in flight at this moment in time, but the store that we're opening in New York is perhaps a great manifestation of how the Brian wants to show up differently and in tends to show up differently and the teams are working through that and Youll see more of that come to come to life over the next few quarters with.

Got that.

Speaker 21: With regards to how we're thinking about the utilization of athletes, obviously we've got such an incredible roster of athletes, and many of them are really keen to have access to this kind of product. One of the expressions we use around here was tunnel walk because we do an amazing job of providing athletes with product they can wear on and off the field when they're training. But how do we allow them to have that swagger, how do we give them this tunnel walk kind of swagger that they deserve if you're operating at that level within the sports world. So again, many of the athletes are really up for this. They're really keen for this. They're really engaged and want to be part of this journey. And again, we've been talking with many of our key athletes with regards to how that comes to life. And you'll continue to see that in the way in which we're showing up from a marketing perspective as well.

How we're thinking about how we're thinking about the utilization of athletes.

Obviously, we've got such an incredible roster of athletes and.

Many of them are really came to have access to that kind of product one of the one of the expressions, we use around here with tunnel work.

Because we do an amazing job of providing athletes with.

With product they can work on and off the field when they training, but how do we allow them to have that swagger, how do we give them the tunnel work kind of swag at it.

Speaker 21: How do we allow them to have that swagger? How do we give them this tunnel walk kind of swagger that they deserve if you're operating at that level within the sports world? So again, many of the athletes are really up for this. They're really keen for this. They're really engaged and want to be part of this journey. And again, we've been talking with many of our key athletes with regards to how that comes to life. And you'll continue to see that in the way in which we're showing up from a marketing perspective as well. And you know, and again,

Deserve if you're operating at that level with them within the sports World. So again many of the athletes are really up for this that really came to this really engaged and want to be part of this journey and again, we've been talking with many of our key athletes with regards to how that comes to life and you'll continue to see that in the way in which we're showing.

Up from a from a marketing perspective, as well and again.

And again, we are just starting to build these relationships with our wholesale partners. We've had these conversations with them to build on your third question.

Speaker 21: And again, we're just starting to build this relationship with our wholesale partners. We've had this conversation with them to build on your third question. They're excited about it as well and the opportunity for us to – again, the opportunity for us to increase our TAM, our total addressable market is something they can clearly see, and they can see that we have an opportunity to play there. Dave, do you want to supplement that?

They're excited about it as well and the opportunity for us to again the opportunity for us to increase our Tam or total addressable market is something they can clearly see and they can see that we have an opportunity to play there Dave do you want to supplement that.

<unk>.

Not surprisingly one of the bigger opportunities as being able to more aggressively.

Dave Bergman: No. I think that not surprisingly, one of the bigger opportunities is being able to more aggressively expand into the mall channel and some of the great partners that are in the mall business. So that's going to be a big opportunity for us. But there could be other distribution opportunities as well. It is early days at this point but definitely a lot of potential. And within the walls and outside the walls of Under Armour, we're really excited about what that could mean.

Aggressively expand into the mall channel and some of the great partners that are in the mall business.

Speaker 3: So that's going to be a big opportunity for us, but there could be other distribution opportunities as well. It is early days at this point, but definitely a lot of potential. Within the walls and outside the walls of Under Armour, we're really excited about what that could mean.

So that's going to be a big opportunity for us, but there could be other distribution opportunities as well. It is early days at this point.

But definitely a lot of potential and within the walls and outside the walls of under armour, we're really excited about what that can mean.

Jim Duffy: And then just following up on that, Dave, this builds on some of your earlier comments, should we think about fiscal 2024 as kind of a foundational year for this and you build on it in fiscal 2025? Or, will we begin to see meaningful revenue contribution from these product categories in fiscal 2024?

And then just following up on that Dave. This builds on some of your earlier comments should we think about fiscal 'twenty four is kind of a foundational year for us and you build on it in fiscal 'twenty five or we will we begin to see meaning.

A meaningful revenue contribution from these product categories in fiscal 'twenty four.

Yes, I think that's a fair assumption fiscal 'twenty four is going to be a little bit more foundational. If you think about our product lifecycle and developing into more of the sports style and building out that aperture a little bit more so you might see a little bit of that coming in back half of fiscal 'twenty four but from a material perspective, it's really going to be fixed.

Dave Bergman: I think that that's a fair assumption. Fiscal 2024 is going to be a little bit more foundational if you think about our product lifecycle and developing into more of the sportstyle and building out that aperture a little bit more. So you might see a little bit of that coming in, back half of fiscal 2024. But from a material perspective, it's really going to be fiscal 2025 and beyond where that big opportunity is.

25, and beyond where that big opportunity is.

Jim Duffy: Understood. Thank you.

Understood. Thank you.

Thank you thanks, Tim.

Multiple: Thank you. Thanks, Jim.

Operator: Thank you. Our next question comes from Laurent Vasilescu with BNP Paribas. Your line is open.

Thank you. Our next question comes from Laurent <unk> with BNP Paribas. Your line is open.

Laurent Andre Vasilescu: Good morning. Thank you very much for taking my question. I wanted to ask about EMEA. Last December, it was up 23%. This time it was up 46%. Is the growth driven by a balance of Footwear and Apparel? If you could give a little bit of color of what you're seeing by regional performance within EMEA. And, Dave, how do we think about 4Q performance for EMEA?

Good morning. Thank you very much for taking my question I wanted to ask about EMEA last December it was up 23% at this time. It was up 46% is the growth driven by balance of footwear and apparel.

Could you could give a little bit of a color on what youre seeing by regional performance within EMEA and Dave How do we think about for key performance for EMEA.

Dave Bergman: Yeah. I mean a couple things. EMEA has been a very healthy region for us, and we've made a lot of progress there which has been great. The team's doing an incredible job there, and we saw increases in Q3 in wholesale, but also on the DTC front. I will say that a little bit of that was some earlier than planned shipments that were originally planned for early Q4 that ended up coming in and making it out in late Q3. So that did help a little bit.

Yes, I mean, a couple of things.

<unk> has been a very healthy region for us.

We've made a lot of progress there, which has been great. The team is doing an incredible job there.

And.

We saw increases in Q3 in wholesale but also on the DTC front.

I will say that a little bit of that with some earlier than planned shipments.

Were originally planned for early Q4 that ended up coming in and making it out in late Q3, so that did help a little bit.

Speaker 12: And we remain agile in the region despite uncertainty including inflationary pressures and rising energy costs and things that that region is dealing with. But we're in a very good spot relative to our key account relationships. We're starting to open more full-price Brand House stores which we're excited about, so definitely a DTC emphasis there. And we continue to see it as a very high growth region for us, and we would continue to expect that in Q4 as well. I wouldn't expect the Q4 growth to be as high as the Q3 growth because there is some timing in there that I mentioned, but we still believe it's going to be a healthy growth area for us as we continue forward.

And we remain agile in the region, despite uncertainty, including the inflationary pressures and rising energy costs and things that that that region is dealing with.

But we're in a very good spot relative to our key account relationships. We're starting to open more full priced brand house stores, which we're excited about so definitely a DTC emphasis there.

Colin Browne: Yeah. I'm building off that, and you asked about the countries. I mean the UK has been a huge focus to us and somewhere we decided a couple years ago we really needed to win, and that's working incredibly well. We have, again, to Dave's point, we have great relationships with our wholesale partners there, and we are in the process of opening a number of stores in the first half of calendar 2023, which will all be opened up between London, and up in Liverpool, and Manchester, and Birmingham, so opening up across the UK as we really start to lean into it.

And we continue to see it as a very high growth region for us and we would continue to expect that in Q4 as well I wouldn't expect the Q4 growth to be as high as the Q3 growth because there is some timing in there that I mentioned.

But we still believe it's going to be a healthy growth area for us as we continue forward and building up that when.

Speaker 29: Again, it's important to understand Europe is really where the brand manifests itself in the way that we want it to show up. And when we show up the right way, we clearly resonate with that core consumer. So the UK is incredibly important. We also have major focus on Germany as well, thinking about how we're kind of continuing to grow in that market. We're a little bit further behind in Germany, but we've got other places in Europe we are now starting to lean into more aggressively from Spain and Portugal through to France. So, we're working our way through the region, but we really wanted to make sure we win in a couple of those core markets before we kind of roll out too aggressively in the region. But it's working and it's a model that we're looking to kind of replicate back here in the US as we build those relationships further.

You asked about the countries I mean, the U K has been.

Huge focus for us in somewhere we decided a couple of years ago, we nearly needed.

We needed to win and that's working incredibly well we have again to Dave's point, we have great relationships with our wholesale partners and we are in the process of opening a number of stores in the first half of calendar 'twenty, three which will be opened up between London and up in Liverpool and Manchester Birmingham. So.

Opening up across the UK as we really start to lean into again.

Speaker 21: we really start to lean into it. Again, it's important to understand, Europe is really where the brand manifests itself in the way that we want it to show up. And when we show up the right way, we clearly resonate with that core consumer. So the UK is incredibly important. We also have major focus on Germany as well, thinking about how we kind of continue to grow in that market. We're a little bit further behind in Germany, but you know, we've got other places in Europe we're now starting to lean into more aggressively from that.

It is important to understand.

Europe is really where the Brian manifest itself in the way that we want to show up and when we show up the right way, we clearly resonate with that pro consumer.

The UK is incredibly important we also have a major focus on Germany as well as thinking about how we can kind of continuing to grow in that market. We're a little bit further behind in Germany, but we've got other places in Europe and are starting to lean into more aggressively from from Spain, and Portugal and France.

Speaker 10: Spain and Portugal through to France. So we're working our way through the region, but we really wanted to make sure we went in a couple of those core markets before we kind of roll out too aggressively in the region. But it's working, and it's a model that we're looking to kind of replicate back here in the U.S.

We're working our way through the region, but we really wanted to make sure. We win in a couple of those core markets before we kind of rollout too aggressively in the region, but it's working and it's a model that we're looking to kind of replicate back here in the U S. As we build those relationships further.

Very helpful and then David I'd Love to ask about.

Laurent Andre Vasilescu: Very helpful. And then, Dave, I'd love to ask about Kate's question around gross margin, just following up around those three buckets. It sounded like the third one, mix, is more structural in nature. Is that the right way to think about it relative to the other two buckets? And then you alluded to inventory turnover of three times over the foreseeable few quarters. How do we think about inventory growth year-over-year over the coming quarters? When does it kind of match revenues?

Speaker 31: about Kate's question around gross margin, just following up around those three buckets. It sounded like the third one mixed. is more structural in nature. Is that right, the right way to think about relative to the other two buckets? And then you alluded to inventory turnover of three X over the foreseeable few quarters. How do we think about inventory growth? year over year over the coming quarters, when does it match revenues?

Kate's question around gross margin just following up.

Around those three buckets it sounded like the third one mix is more structural in nature.

Speaker 28: is more structural in nature. Is that right, the right way to think about relative to the other two buckets? And then you alluded to inventory turnover of three X over the foreseeable few quarters. How do we think about inventory growth? year over year over the coming quarters, when does it match revenues?

Speaker 32: Is that right, the right way to think about relative to the other two buckets? And then you alluded to inventory turnover of three X over the foreseeable few quarters. How do we think about inventory growth? year over year over the coming quarters, when does it match revenues?

Is that the right way to think about it relative to the other two buckets and then you alluded to inventory turnover.

Three times over the foreseeable few quarters, how do we think about inventory growth.

Speaker 30: year over year over the coming quarters, when does it match revenues?

Year over year over the coming quarters when does it match revenues.

Yes, I would say a couple of things relative to gross margin as.

Dave Bergman: Yeah, Laurent, I would say a couple things. Relative to gross margin, as we think about that, I mentioned a third is the higher promotions and discounting. That's probably the biggest kind of individual piece for this year. The second bucket around elevated product cost, freight expenses, changes in FX, the two bigger pieces in there would be the product cost headwinds and then also the FX headwinds. Freight was a big headwind in the front half of the year but has now kind of flipped the other way a little bit.

As we think about that I mentioned, a third is the higher promotions and discounting. That's that's probably the biggest kind of individual piece for this year the second bucket around.

Elevated product cost freight expenses changes in FX the two.

Two bigger pieces and there would be the product cost headwinds and then also the FX headwinds.

Freight was a big headwind in the front half of the year, but it's now kind of flip the other way a little bit.

Speaker 12: And then the last one, which was more to your question, it is a little bit more structural. So, the mix impact, which is the other third remaining, probably the biggest piece of that is just having a higher mix of distributor revenue, which is a little bit lower gross margin business for us but still very profitable on the bottom line. And then there's a little bit of product mix in there with the higher percentage of Footwear revenue, which is a little bit of a gross – little bit lower gross margin for us. And then a little bit, or even a smaller amount impact with the region mix. But the biggest one in there is the channel mix with the higher distributor sales. And we'll provide fiscal 2024 inventory color when we get to our fiscal 2024 outlook in May.

And then the last one which was more to your question. It is a little bit more structural so the mix impact which is the other third remaining.

Probably the biggest piece of that is just having a higher mix of distributor revenue.

There's a little bit lower gross margin business for us, but still very profitable on the bottom line.

And then theres, a little bit of product mix in there with the higher percentage of footwear revenue, which is a little bit of a growth a little bit lower gross margin for us.

Speaker 12: a little bit of product mix in there with the higher percentage of footwear revenue, which is a little bit of a gross, a little bit lower gross margin for us. And then a little bit, or even a smaller amount, impact with the region. But the biggest one in there is the channel mix with the higher distributor sales. And we'll provide fiscal 24 inventory color when we get to our fiscal 24 outlook in May.

And then a little bit or even a smaller amount of impact with the region mix, but the biggest one in there as the channel mix with the higher distributor sales.

Speaker 3: But the biggest one in there is the channel mix with the higher distributor sales. And we'll provide fiscal 24 inventory color when we get to our fiscal 24 outlook in May.

Speaker 5: And we'll provide fiscal 24 inventory color when we get to our fiscal 24 outlook in May.

And we will provide fiscal 'twenty four inventory color when we get to our fiscal 'twenty four outlook in may.

Very helpful. Thank you very much.

Laurent Andre Vasilescu: Very helpful. Thank you very much.

Multiple: Thank you. Thank you, Laurent.

Thank you thanks, Brian .

Operator: Thank you. Our next question comes from Matthew Boss with JPMorgan. Your line is open.

Thank you. Our next question comes from Matthew Boss with Jpmorgan. Your line is open.

Matthew Boss - JPMorgan Chase & Co, Research Division: Great. Thanks. So, Colin, maybe as we enter 2023, you mentioned an uneven macro backdrop. But how are you seeing the progression of trends in the North America athletic channel, maybe post-holiday? And then, Dave, maybe just as a follow-up, could you speak to the composition maybe below the surface within inventory? What's durable versus what's at risk for markdown? And then to your point on the continued promotions, is there any parameters for us best to think about gross margin next year?

Great. Thanks, So Colin maybe as we enter 2003, you mentioned an uneven macro backdrop.

How are you seeing the progression of trends in the North America Athletic Channel, maybe post holiday and then Dave maybe just as a follow up could you speak to the composition, maybe below the surface within inventory, what's durable versus what's at risk from markdown and then to your point on the continued promotions.

Speaker 33: Can you speak to the composition? below the surface within inventory? What's durable versus what's at risk for markdown? And then to your point on the continued promotion. Is there any parameters for us best to think about gross margin next year?

Speaker 33: below the surface within inventory? What's durable versus what's at risk for markdown? And then to your point on the continued promotion. Is there any parameters for us best to think about gross margin next year?

Is there any parameters for us best to think about gross margin next year.

Speaker 33: Is there any parameters for us best to think about gross margin next year?

Colin Browne: Well, Matthew, thanks for the question. I think the word I used earlier is bloated. I think the industry, certainly the sports industry, is pretty bloated at this moment in time just because of the amount of inventory that has hit the stores over the past six months. The overhang, and I call it the hangover from COVID a little bit where we had so much product that was late, that was all kind of coming in at the same time, is where we saw perhaps a slowdown in demand somewhat, but we saw a correction in demand. So you've got all of those things happening at the same time. So you've just got a lot of inventory out there. And I think, as we talked about already, and I won't belabor the point, but I think it's going to take some while for that to kind of work its way through.

Well Matthew Thanks.

<unk>.

Thank you.

So what I used earlier is bloated I think I think the industry and certainly the sports industry is pretty bloated at this moment in time, just because the amount of inventory that has hit the hit hit the stores over the past six months.

The overhanging kind of call it the hangover from Covid, a little bit where we had so much product that was like that was all kind of coming in at the same time as we saw.

Perhaps a slowdown in demand somewhat but we saw.

Correction in demand so you've got all of those things happening at the same time. So you've just got a lot of inventory out there and I think as we've talked about already.

Speaker 10: I think, again, I think we're in a better position than most to manage through it. But when the industry sneezes, we catch a cold somewhat, as does everyone else, so we're having to play within that environment. But I think we're in a better position because of the way we've managed inventories to power out this quicker and hopefully protect our bottom line as we go forward. Dave?

I won't belabor the point, but I think it's going to take some while for that to kind of work its way through.

Again, I think we're in a better position than most to kind of manage through it but when the inventory when the industry sneezes, we catch a cold somewhat as does everyone else. So we're having to play within that environment, but I think we're in a better position because of the way we've managed inventories to power out of it quicker and hopefully kind of protect our bottom line as we go forward.

Speaker 10: play within that environment, but I think we're in a better position because of half of the way we've managed inventory is to power out this quicker and hopefully kind of protect our bottom line as we go forward.

Dave Bergman: Yeah. I think, Matt, when you think about our inventory, we are in a fairly healthy place. We do not have a lot of aged inventory. So if you look at what's in that 50% growth, it's not like there's a whole bunch of stuff that is two, three, four seasons old. It is all much more current, and therefore, we feel more comfortable being able to move through that in a reasonable way. And we did, as I mentioned before, take a lot of the seasonless product and we're going to pack and hold that and sell that next year as opposed to kind of moving that through liquidation or something at a lower margin or less brand accretive way. So, we're in a position to be able to do that. We're comfortable doing that.

Yes, I think Matt when you think about our inventory.

Speaker 3: we are in a fairly healthy place. We do not have a lot of aged inventory. So if you look at what's in that 50% growth, it's not like there's a whole bunch of stuff that is... two, three, four seasons old. It is all much more current and therefore we feel more comfortable being able to move. that in a reasonable way. And we did, as I mentioned before, take a lot of the seasonless product and we're going to pack and hold that and sell that next year as opposed to kind of moving that through liquidation or something at a at a lower margin or less branded creative way. So we're in a position to be able to do that. We're comfortable doing that. And when you think about, you know, gross margin next year.

We are in a fairly healthy place, we do not have a lot of aged inventory. So if you look at what's in that 50% growth its not like Theres a whole bunch of stuff that is 234 seasons old. It is all much more current.

Speaker 3: two, three, four seasons old. It is all much more current and therefore we feel more comfortable being able to move. that in a reasonable way. And we did, as I mentioned before, take a lot of the seasonless product and we're going to pack and hold that and sell that next year as opposed to kind of moving that through liquidation or something at a at a lower margin or less branded creative way. So we're in a position to be able to do that. We're comfortable doing that. And when you think about, you know, gross margin next year.

And therefore, we feel more comfortable being able to move through that in a reasonable way.

Speaker 3: that in a reasonable way. And we did, as I mentioned before, take a lot of the seasonless product and we're going to pack and hold that and sell that next year as opposed to kind of moving that through liquidation or something at a at a lower margin or less branded creative way. So we're in a position to be able to do that. We're comfortable doing that. And when you think about, you know, gross margin next year.

And we did as I mentioned before it takes a lot of the seasonal this product and we're going to pack and hold that and sell that next year as opposed to kind of moving that through liquidation or something at a lower margin or less brand accretive way. So we're in a position to be able to do that we're comfortable doing that.

So when you think about gross margin next year, we are going to wait until the may call to give color on that because theres just a lot of puts and takes.

Speaker 12: And when you think about gross margin next year, we are going to wait until the May call to give color on that because there's just a lot of puts and takes. You would think that back half of next fiscal year, you would probably have some less promotions. You would think that next year we would have lower freight cost than what we dealt with, at least the front half of this year. But then on the flip side, Footwear is probably still going to grow faster than Apparel, and that's a little bit of a headwind, which we're comfortable with.

Speaker 12: you would think that back half of next fiscal year you would probably have some less promotion. You would think the next year we would have lower freight costs than what we dealt with at least the front half of this year. But then on the flip side, you know footwear is probably still going to grow faster than apparel and that's a little bit of a headwind which we're comfortable with.

You would think that back half of next fiscal year, you would probably have some less promotions you would think that next year, we would have lower freight cost and what we dealt with at least the front half of this year.

Speaker 3: You would think the next year we would have lower freight costs than what we dealt with at least the front half of this year. But then on the flip side, you know footwear is probably still going to grow faster than apparel and that's a little bit of a headwind which we're comfortable with.

But then on the flip side footwear, it's probably still going to grow faster than apparel and thats, a little bit of a headwind, which we're comfortable with and relative to foreign currency, who knows right. I mean, it's difficult. So theres a lot of puts and takes out there. Obviously, we're going to continue to drive forward and we've got a lot of initiatives to do so.

Speaker 12: But then on the flip side, you know footwear is probably still going to grow faster than apparel and that's a little bit of a headwind which we're comfortable with.

Speaker 3: And relative to foreign currency, who knows, right? I mean, it's difficult. So there's a lot of puts and takes out there. Obviously, we're going to continue to drive forward, and we've got a lot of initiatives to do so, but we're going to wait until the May call to be able to give more color there.

But we're going to we're going to wait until the may call to be able to give more color there.

Multiple: Thank you. Our next question comes from Tom Nikic with Wedbush. Your line is open. Hey. Good morning, guys. Thanks for taking my question. The last couple of years, you've done a lot of work around retraining the consumer to look for you at full price and pulling back on discounts and pulling back on the off-price channel. And I think, unfortunately because of this inventory bloat that you talk about, I think obviously you've been more promotional than you've wanted to be. How do you avoid, I guess, having the customer be trained to look for your brand at a discount? And how do you eventually rein in the discounts and the promos that are occurring right now without facing pushback from the consumer, who has been able to buy your brand and your competitors at a discount?

Thank you. Our next question comes from Tom <unk> with Wedbush. Your line is open.

Speaker 24: Hey, good morning guys. Thanks for taking my question. The last couple of years you've... done a lot of work around. retraining the consumer. to look for you at full price and pulling back on discounts and pulling back. the off-price channel. I think unfortunately because of this inventory bloat that you've talked about, I think obviously you've been more promotional. than you want it to be. How do you avoid... I guess having the customer be trained to look for your brand at a discount. How do you eventually... reign in the discounts and the promos that are. that are occurring right now without you know, facing pushback. from the consumer who has been able to buy. your brand and your competitors. at a discount.

Hey, good morning, guys. Thanks for taking my question.

Yes, the last couple of years.

Speaker 27: done a lot of work around. retraining the consumer. to look for you at full price and pulling back on discounts and pulling back. the off-price channel. I think unfortunately because of this inventory bloat that you've talked about, I think obviously you've been more promotional. than you want it to be. How do you avoid... I guess having the customer be trained to look for your brand at a discount. How do you eventually... reign in the discounts and the promos that are. that are occurring right now without you know, facing pushback. from the consumer who has been able to buy. your brand and your competitors. at a discount.

Done a lot of work around.

Retraining the consumer to look for you at full price and pulling back on discounts and pulling back on the off price channel.

Speaker 27: retraining the consumer. to look for you at full price and pulling back on discounts and pulling back. the off-price channel. I think unfortunately because of this inventory bloat that you've talked about, I think obviously you've been more promotional. than you want it to be. How do you avoid... I guess having the customer be trained to look for your brand at a discount. How do you eventually... reign in the discounts and the promos that are. that are occurring right now without you know, facing pushback. from the consumer who has been able to buy. your brand and your competitors. at a discount.

Speaker 27: to look for you at full price and pulling back on discounts and pulling back. the off-price channel. I think unfortunately because of this inventory bloat that you've talked about, I think obviously you've been more promotional. than you want it to be. How do you avoid... I guess having the customer be trained to look for your brand at a discount. How do you eventually... reign in the discounts and the promos that are. that are occurring right now without you know, facing pushback. from the consumer who has been able to buy. your brand and your competitors. at a discount.

Speaker 27: the off-price channel. I think unfortunately because of this inventory bloat that you've talked about, I think obviously you've been more promotional. than you want it to be. How do you avoid... I guess having the customer be trained to look for your brand at a discount. How do you eventually... reign in the discounts and the promos that are. that are occurring right now without you know, facing pushback. from the consumer who has been able to buy. your brand and your competitors. at a discount.

I think unfortunately because of the inventory.

Speaker 27: I think unfortunately because of this inventory bloat that you've talked about, I think obviously you've been more promotional. than you want it to be. How do you avoid... I guess having the customer be trained to look for your brand at a discount. How do you eventually... reign in the discounts and the promos that are. that are occurring right now without you know, facing pushback. from the consumer who has been able to buy. your brand and your competitors. at a discount.

Bloat that you've talked about I think obviously, you've been more promotional than you want it to be how do you avoid.

Speaker 27: than you want it to be. How do you avoid... I guess having the customer be trained to look for your brand at a discount. How do you eventually... reign in the discounts and the promos that are. that are occurring right now without you know, facing pushback. from the consumer who has been able to buy. your brand and your competitors. at a discount.

Speaker 34: How do you avoid... I guess having the customer be trained to look for your brand at a discount. How do you eventually... reign in the discounts and the promos that are. that are occurring right now without you know, facing pushback. from the consumer who has been able to buy. your brand and your competitors. at a discount.

Wade.

Speaker 34: I guess having the customer be trained to look for your brand at a discount. How do you eventually... reign in the discounts and the promos that are. that are occurring right now without you know, facing pushback. from the consumer who has been able to buy. your brand and your competitors. at a discount.

I guess, having the customer be trained to look for your brand at a discount how do you eventually.

Speaker 27: How do you eventually... reign in the discounts and the promos that are. that are occurring right now without you know, facing pushback. from the consumer who has been able to buy. your brand and your competitors. at a discount.

Rain in the discounts of the promos that are.

Speaker 27: reign in the discounts and the promos that are. that are occurring right now without you know, facing pushback. from the consumer who has been able to buy. your brand and your competitors. at a discount.

Speaker 27: that are occurring right now without you know, facing pushback. from the consumer who has been able to buy. your brand and your competitors. at a discount.

That are occurring right now without facing pushback from the consumer who has been able to buy <unk>.

Speaker 27: you know, facing pushback. from the consumer who has been able to buy. your brand and your competitors. at a discount.

Speaker 27: from the consumer who has been able to buy. your brand and your competitors. at a discount.

Speaker 27: your brand and your competitors. at a discount.

Brand and your competitors.

Speaker 27: at a discount.

At a discount.

Well.

Colin Browne: This is Colin jumping in here. And thank you for that question, Tom. I think there is a couple of areas that I think are relevant to this. Number one, as you've talked about already, we've walked away from quite a bit of undifferentiated retail at this moment in time, and we have no intention of going back. So from the point of view of kind of ensuring that we protect that core product that we have, we don't see that kind of sliding again. We've also managed, to Dave's earlier point, we're also making sure we control our liquidation at an appropriate level as well.

This is Colin jump again here and thank you for that question, Tom I think Theres a couple of areas that I think are relevant to this number. One is you talked about already we've walked away from quite a bit of undifferentiated retail at this moment in time and we have no intention of going back so from the point of view of kind of.

Sure that we protect that that core product that we have.

We don't see that kind of sliding again, we've also managed to Dave's earlier point, we're also making sure we control our liquidation at an appropriate level as well so from the point of view of not allowing us to slide further into that kind of that trap, we're working aggressively to make sure that that doesn't happen at the same time we.

Speaker 21: So, from the point of view of not allowing us to slide further into that kind of – that trap, we're working aggressively to make sure that that doesn't happen.

Much of the work that we've been done recently as working through how do we bring more bedroom best product. So at the top of the house, we've got a really good.

Speaker 21: At the same time, much of the work that we've done recently is working through how do we bring more better and best product to the top of the house. We've got a really good level brand here in the US, but the opportunity for us to build into that better and best is kind of what we're working on and where Kevin's spending a lot of his time, because his history and his context for the brand really helps us understand that at the same time.

Good level brand here in the U S, but the opportunity for us to build into that bedroom best is kind of what we're working on and what Kevin is spending a lot of time, because his history and its context for the Brian really helps us understand that at the same time. We're also working through building out our wholesale distribution strategy to kind of try and increase the opportunity of lending this stuff at that holds.

Speaker 10: We're also working through building out our wholesale distribution strategy to kind of try and increase the opportunity of landing this stuff at a wholesale level and working through how that segmentation works and how we show up. Moving through to live clearly gives us an opportunity to think about that a little bit, from the point of view of where we show up. And Dave talked about a little bit about how do we make sure we're showing up in the right places at the mall because that gives us, again, a huge opportunity to lean into that as well.

<unk> level and working through how that segmentation works and how we show up now moving through to lift clearly gives us an opportunity to think about that a little bit from the point of view of where we show up and Dave talked about a little bit about how do we make sure we're showing up in the right places at the mall because that gives us again, a huge opportunity utility into that as well.

Speaker 10: And finally, we've been continuing to make oversized investments in our own omni-channel and DTC kind of parts of our business, and certainly thinking about how we show up at retail, the Flatiron store in Manhattan is a great example and a first step on that journey, but at the same time continuing to invest in our loyalty programs, which, again, we've rolled that out last year; we're looking to roll that out more broadly here in the US later this year. And we're seeing great results from that. So now, it's a question of offense and defense. We're defending by making sure we don't slide back into that lower channel kind of network of retail, but at the same time, putting in place really strong plans and strategies to ensure that we're driving – continuing to drive the brand up to that next level.

Finally, we've been continuing to make.

Oversized investments in Omnichannel, and DTC kind of parts of our business and certainly thinking about how we show up at retail the Flatiron store in Manhattan is a great example, and a first step on that journey, but at the same time continuing to invest in loyalty programs, which again, we we've rolled that out last year, we're looking to roll out or more.

Speaker 10: We rolled that out last year. We're looking to roll that out more broadly here in the US later this year, and we're seeing great results from that. So, it's a question of offense and defense. We're defending by making sure we don't slide back into that lower channel kind of network of retail, but at the same time, putting in place really strong plans and strategies to ensure that we're continuing to drive the brand up to that next level.

Broadly here in the U S. Later this year and we're seeing great results from that so it's a question of offense and defense.

Defending by making sure we don't slide back into that that lower channel kind of network.

Retail, but at the same time, putting in place really strong plans.

And the strategy is to ensure that we're driving continuing to drive the brand up to that next level.

Tom Nikic: That's helpful. Thanks, Colin and best of luck next year.

That's helpful. Thanks, Colin.

Colin Browne: Thank you, Tom.

Thank you Phil.

Thanks, Tom.

Dave Bergman: Thanks, Tom.

Operator: And we'll take our last question from Michael Binetti with Credit Suisse. Your line is open.

And we will take our last question from Michael <unk>.

<unk> with credit Suisse. Your line is open.

Michael Binetti: Hey. Thanks for all the detail here and for taking our question. So, if I could just follow that last one very quickly. As you look at the distribution map in North America for 2024, are there also parts of the US distribution map that you need to mix away from to get to that targeted better/best mix on product as you kind of rethink distribution more broadly? And then, I guess, one on SG&A. You talked a little bit about gross margin and how to think about some of the themes for next year. But the same way: marketing you commented on the near term, to Bob's question earlier, it sounds like 10%, 11% is where you plan to live next long term, I guess. As we think about the other buckets, I'm guessing incentive comp, everybody would hope it would come back next year, but are there any other buckets to just be mindful of? Maybe some front-loaded investment as you build the teams for live? Any other buckets that we should be thinking about as we look out to next year into the May call?

Hey, Thanks for all the detail here and for taking our question. So if I could just follow up that last one very quickly as you look at the distribution map in North America with 24 or.

There are also parts of the U S distribution map that you need to mix away from to get to that targeted better best mix on product as you kind of rethink distribution.

Speaker 36: more broadly. And then I guess one on SG&A, you talked a little bit about gross margin and how think about some of the themes for next year, but same way marketing you commented on the near term to Bob's question earlier, it sounds like 10-11 is where you plan to live next long term, I guess. As we think about the other buckets, I'm guessing incentive comp everybody would hope to come back next. But are there any other buckets to just be mindful of? Maybe some front-loaded investment as you build the teams for Liv? Any other buckets that we should be thinking about as we look out to next year into the make?

More broadly.

And then I guess, one on SG&A, you talked a little bit about gross margin and how to think about it.

Some of the themes for next year, but same same way marketing you commented on the near term to Bob's question earlier. It sounds like 2011 is where where you plan to live next long term I guess as we think about the other buckets I am guessing incentive comp everybody would hope you'll come back next year, but are there any other buckets to just be mindful of maybe some frontloaded investment as you build the teams for live.

Speaker 4: But are there any other buckets to just be mindful of? Maybe some front-loaded investment as you build the teams for Liv? Any other buckets that we should be thinking about as we look out to next year into the make?

Any other buckets that we should be thinking about as we look out to next year into the may call.

Colin Browne: Thank you, Michael. I'll take the first part of that, and then I'll pass it over to my partner in crime, Dave, to take the SG&A part. But if I had my – our plans here, Michael, is to not shrink the bottom of the market but grow the top of the market. We want to get bigger as an overall brand. We believe, when we look at the way we resonate with consumers, when we look at the data we see from a consideration point of view, we have a huge opportunity out there.

Well. Thank you Michael I'll take the first part of that and then I'll pass it over to my partner in crime, Dave to have to take the SG&A part.

But.

Speaker 21: If I had my, our plan here, Michael, is to not shrink the bottom of the market, but grow the top of the market. You know, we want to get bigger as an overall brand. We believe, and when we look at the way we resonate with consumers, when we look at the data, we see three...

If I had my plan.

Plans here Michael is two two to not shrink the bottom of the market, but grow the top of the market.

Want to get bigger as an overall, Brian we believe when we look at the way, we resonate with consumers when we look at the data we.

Speaker 19: And part of that is not necessarily about shrinking the bottom end of the market. I think we've already done that to a large degree by walking away from much of those kind of undifferentiated doors, which didn't make sense. But it's really about, how do we grow at the top end of the market.

See from consideration point of view.

We have a huge opportunity out there and part of that is not necessarily about shrinking the bottom end of the market I think we've already done that to a large degree by walking away from much of those those those kind of different undifferentiated doors, which just didn't make sense, but it's really about how do we grow at the top end of the market. So I'll focus is more about trying to elevate the brand and again.

Speaker 10: So our focus is more about trying to elevate the brand, and again, protect the core and elevate for more, for once a better way of putting it, is kind of how we're spending our time and thinking through the product we're developing, the stories we're telling, the consumer we're engaging with, and the entire strategic evolution that we've got in place and we're working through will hopefully help us deliver against that. And, Dave, do you want to jump into the SG&A?

Protect the Corp, and elevate for more for better way of putting it is kind of how we're spending our time and thinking through the product developing stories were telling the consumer we're engaging with.

The entire strategic evolution that we've got in place and we're working through but hopefully help us deliver against that and Dave do you want to jump into the SG&A, Yes, I mean, I think from an SG&A perspective.

Dave Bergman: Yeah. I mean, from an SG&A perspective, through a lot of difficult work over the years, we are now more nimble, and so we're able to proactively manage much better than we were years back. And so, if you think about this year with some of the pressures that have developed in the market, we've slowed down and prioritized hiring. We prioritized marketing investments differently and better, continuing to manage things like consulting and T&E and things like that, and doing that has been not as difficult as it used to be in the past. And I think some of that also goes to the enterprise mindset within the company, whether it be the alignment of our leadership team and being able to make tough calls and drive through and prioritize further to be able the to protect the bottom line or even if we just think about all the teammates that we have across the world and how much they're looking out for the brand and trying to spend as if it's their own money and kind of make $1 spend like $3.

Through a lot of difficult work over the years, we are now more nimble and so we're able to proactively managed much better than we were years back and so we think about this year.

Speaker 3: And so we're able to proactively manage much better than we were years back. And so, you know, think about this year with some of the pressures that have developed in the market, you know, we've slowed down and prioritized hiring. We prioritize marketing investments differently and better. Continuing to manage things like consulting and T&E and things like that. And doing that has been not as difficult as it used to be in the past. And I think some of that also goes to the enterprise mindset within the company. Whether it be the alignment of our leadership team and being able to make tough calls and drive through and prioritize further to be able to protect the bottom line.

With some of the pressures that are developed in the market, we've slowed down and prioritized hiring we prioritize marketing investments differently and better.

Continuing to manage things like consulting and <unk> and things like that.

Doing that has been.

Not as difficult as it used to be in the past and I think some of that also goes to the enterprise mindset within the company.

Whether it be the alignment of our leadership team and being able to make tough calls in drive thru and prioritize further to be able to protect the bottom line or even if we just think about all the teammates that we have across the world and how much they're looking out for the brand and trying to spend as if it's their own money and kind of make $1 spent like three and.

Speaker 3: And that enterprise mindset goes a long way for us, and it's just been, I don't want to say the word easier because these are tough decisions. But we've been able to act more quickly and more proactively on the cost structure, and we're going to continue to do that as we drive into next year and beyond. So I think we're set up well for that, and it's time to drive.

That enterprise mindset goes a long way for us and it's just been I don't want to say the word easier because these are tough decisions, but we've been able to act more quickly and more proactively on the cost structure and we're going to continue to do that as we drive in the next year and beyond so I think we're set up well for that.

Colin Browne: Yeah. And I'll just close out. I think we've done – I think over the past few years we've built an operating model that clearly works. We've had a solid quarter I think that demonstrates the fact that we've got it. We have a strategic refinement that we're putting in place at this moment in time and that's starting to build out and starting to flow through the markets and starting to work with our teammates to kind of bring it to its full manifestation around. And I'm excited for how that's all going to come together. I think we're well teed up for future success.

And it's time to drive forward the time to go yes, and I'll just close out.

We've done I think over the past few years, we built an operating model that clearly works, we had a solid quarter, but I think that demonstrates the fact that we've got it.

We have a strategic refinement that we're putting in place at this moment in time.

And that's starting to build out and starting to flow through the market and starting to flow through work with our teammates to kind of bring it to its full manifestation.

Multiple: Totally agree. 

I'm excited about how that's all going to come together I think we're well teed up for future success totally agree.

And then follow that with just one more I think you used the word stagnant twice.

In regards to the inventory clearing youre seeing in the marketplace today obviously.

Michael Binetti: And can I follow that with just one more? I think you used the word stagnant twice in regards to the inventory clearing you're seeing in the marketplace today. Obviously we have your revenue outlook for the fourth quarter, but would you mind elaborating a little bit on where you see pockets of stagnation in POS out there? Perhaps were you surprised to see that inventories are turning slower than you expected coming out of holiday?

We have your revenue outlook for the fourth quarter, but would you mind elaborating a little bit on where you see pockets of stagnation and pass out there perhaps.

Were you surprised to see that inventories are turning slower than you expected coming out of holiday.

Colin Browne: I think there's just a lot out there. I think I'll use bloated again, because I think I've used that a couple of times as well. So that may be the keyword with regards to inventory. I think it's just bloated. And I think different channels obviously have different issues that they're dealing with, and different brands are obviously handling it in different ways. But you only have to go and look on websites to see how many people are running discounts out there to see how challenging it is. So, yeah. Again, I think it's just going to take some time for it to work through.

I think there's just a lot out there I think.

I'll use bloated again, I think I've used that couple of times as well so that might be the keyword with regards to inventory I think I think it's just bloated and I think its different channels. Obviously, you have different different issues that they're dealing with.

Different brands or obviously handling it in different ways, but.

You only have to go and look on websites to see how many people are running discounts out there are challenging it is.

Speaker 21: look on websites to see how many people are running discounts out there to see how challenging it is. So, yeah, again, I think it's just going to take some time for it to work through.

So yes again I think it's just it's just.

I'm going to take some time for it to work through.

Michael Binetti: All right. Thanks, guys. Great detail. Appreciate the help.

Alright, Thanks, guys great detail I appreciate the help.

Multiple: Thanks, Michael. Thank you, Michael. Take care.

Thanks, Mike. Thank you Michael Thank you.

Thank you. This concludes the question and answer session. Thank you for your participation you may now disconnect everyone have a great day.

Operator: Thank you. This concludes the question-and-answer session. Thank you for your participation. You may now disconnect. Everyone, have a great day.

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