Retailer's decision to reduce discounts and promotions leads to decline in Under Armour sales.

• Wall Street's quarterly estimates were surpassed by Under Armour on both the top and bottom lines.
• The company revised its full-year profit forecast following a $434 million settlement of a securities lawsuit from 2017.
• In North America, sales declined across all categories, including apparel, footwear, and accessories.

On Thursday, North America's quarterly sales fell 14%, prompting the company to adjust its full-year profit guidance after settling a years-old securities lawsuit for $434 million.

Despite Wall Street's expectations, the company surpassed both the top and bottom lines.

Based on a survey of analysts by LSEG, how did the athletic apparel company perform in its first fiscal quarter compared to Wall Street's expectations?

• Earnings per share: 1 cent adjusted vs. a loss of 8 cents expected
• Revenue: $1.18 billion vs. $1.15 billion expected

In the three months ended June 30, Under Armour reported a loss of $305.4 million, or 70 cents per share, compared with a profit of $10 million, or 2 cents per share, a year earlier. However, excluding one-time expenses, it reported a profit of $4 million, or 1 cent per share.

A year ago, sales were $1.32 billion, but they decreased by 10% to $1.18 billion.

In 2017, Under Armour was accused of defrauding shareholders about its revenue growth, leading to a securities lawsuit that was settled for $434 million in late June, just before a trial was set to begin.

The company stated that it was not accepting responsibility for any fault or wrongdoing, but had decided to settle the case, which had been ongoing for nearly seven years, due to the high costs and risks associated with litigation. Under Armour will use cash from its revolving credit facility to pay the settlement.

The company anticipates a loss in fiscal 2025, with losses per share projected to be between 53 cents and 56 cents, and adjusted earnings per share to be between 19 cents and 22 cents.

Under Armour previously projected full-year earnings of 2 cents to 5 cents per share, but later adjusted its earnings forecast to between 18 cents and 21 cents per share.

Under Armour is currently undergoing a comprehensive restructuring plan in an attempt to regain relevance, reverse a sales decline, and increase profits. The company announced earlier this year that it would lay off an undisclosed number of employees, reduce promotions and discounts, and simplify its product line to improve competitiveness. Additionally, Under Armour is aiming to adopt a premium brand image.

Two months after former executive Stephanie Linnartz was removed as Under Armour's CEO, its founder Kevin Plank returned to lead the company once more.

Despite early progress in its efforts, Under Armour's sales still tumbled during the quarter.

In North America, Under Armour's largest market, sales decreased by 14% to $709 million, but surpassed analysts' expectations of $669.1 million. Wholesale revenue also decreased by 8% to $681 million, while direct-to-consumer sales declined by 12% to $480 million.

The decline in sales at Under Armour's owned and operated stores was 3%, while their online sales dropped by 25%. The company attributed this decline to "planned decreases in promotion activities."

Sales of apparel, footwear, and accessories all decreased.

To regain growth and establish itself as a premium retailer in a competitive athletic apparel market, Under Armour is recruiting new talent and expanding into sustainable fashion.

On Tuesday, the retailer announced the acquisition of sustainable fashion brand Unless Collective and appointed its founder, former -exec Eric Liedtke, as executive vice president of brand strategy.

Eric will be globally accountable for amplifying Under Armour's brand identity and storytelling, its comprehensive strategic planning process, and executing transformational initiatives that accelerate growth for UA while continuing to lead and curate, unless.

The release stated that he will report to President & CEO Kevin Plank and manage UA's brand presence through various marketing functions, including category marketing, consumer intelligence, creative, marketing operations, loyalty, social media, sports marketing, and all strategy functions.

The brand claims to be the first all-plant, zero-plastic fashion brand and aims to demonstrate that plants can replace plastics in the production of clothing and shoes.

Read the full earnings release here.