Shares for Under Armour Inc. are jumping today — the stock was up 1.3 percent to $19.98 at market open — after the brand posted second-quarter results that were modestly better than expected as it works toward transforming its business.
The Baltimore-based athletic label posted Q2 sales of $1.17 billion, a gain of 8 percent over last year’s comparable period, besting analysts’ forecasts for sales of $1.15 billion. Notably, the company saw a return to growth in North America, where it has struggled recently amid blockbuster growth at Adidas and ongoing dominance at Nike. Sales in the region advanced 2 percent to $843 million.
However, as expected, the firm widened its net losses to $95.5 million, or 21 cents per diluted share (from $12.3 million last year). On an adjusted basis, losses were 8 cents per share and in line with market watchers’ forecasts.
“Through the first half of 2018, we are making progress toward our transformation of running a more operationally excellent company while amplifying the power of the Under Armour brand,” said chairman and CEO Kevin Plank, who previously suggested much of the brand’s recent challenges were the result of rapid expansion. “The ongoing improvements in our structure, systems and go-to-market process across our global business better position us to drive a more consistent, predictable path to deliver for our consumers, customers and shareholders over the long term.”
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Driven by growth in its running and team sports lines, footwear revenues advanced 15 percent during the period to $271 million. Apparel continued to bring in the lion’s share of sales, gaining 10 percent to $747 million. Overall, the label saw a 9 percent increase in wholesale customer revenue, a 7 percent increase in direct-to-consumer revenue and international growth of 28 percent (to $302 million).
Looking ahead, Under Armour expects its full-year revenue to increase 3 to 4 percent, reflecting a low- to mid-single-digit decline in North America and international growth of greater than 25 percent. It had previously predicted a mid-single-digit decline in North America. Adjusted earnings per share are still expected in the range of 14 to 19 cents.
The company expects to post an operating loss of $50 million to $60 million. It previously predicted operating income of $20 million to $30 million. Excluding the impact of continued restructuring efforts, adjusted operating income is still expected to be $130 million to $160 million.
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