Dive Brief:

• Under Armour on Thursday reported that first quarter revenue rose 2% to $1.2 billion from $1.19 billion in the year-ago quarter. Wholesale revenue rose 5% to $818 million and direct-to-consumer revenue fell 6% to $331 million, representing 27% of total revenue, according to a company press release.

• The brand's fortunes are still under pressure at home. North America revenue fell 3% to $843 million while the international business rose 12% to $328 million (17% currency neutral), the company said.

• Net income rose to $22.5 million from last year's $30.2 million loss, as gross margin expanded by 100 basis points to 45.2% year over year. Inventory declined 24% to $875 million, and the company trimmed its total debt by 36% to $590 million. Selling, general and administrative expenses declined 1% to $510 million, or 42.3% of revenue.

Dive Insight:

Under Armour managed to beat expectations from analysts and itself in the first quarter, but, especially at home, the brand has more to do.

"Overall, the quarter showed progress against its strategic initiatives, but some challenges remain including market share losses in [North America]," Telsey Advisory Group analyst Cristina Fernández said in comments emailed to Retail Dive, noting that the brand's strong footwear sales were a surprise.

Apparel revenue in the quarter rose 1% to $775 million as footwear revenue rose 8% to $293 million, primarily driven by strength in the run category, Under Armour said. Improvements are indeed evident, but don't go far enough, according to analysts at Jane Hali & Associates, who noted more promotional activity in the U.S. in what had previously been a full-price business, in contrast to the full-price continuing in China and the UK.

"We see some improvement in footwear and apparel. However, the on-trend lines are small, and they do not have continuous drops. This is not going to add to top line growth," Jane Hali said in comments emailed to Retail Dive. "We remain concerned on the lack of newness we see at [Kohl's, Dick's and Macy's], their main wholesale accounts."

Those retailers feature "very basic product" from Under Armour, according to Jane Hali store visits. Kohl's offers Under Armour alongside Nike and Adidas, with Nike "always having the premier positioning," analysts said. "[Dick's] had Men's Champion taking an aisle of the space away from [Under Armour]. There was 25% off many [Under Armour] products throughout the store."

That's especially concerning in light of assertive innovations at Nike, Adidas and Lululemon and those brands' efforts to reach the growing women's market, Jane Hali analysts also said. 

During the quarter, Under Armour made a push into India, opening its first store in New Delhi, the company announced in March.