Under Armour Gets ‘Back on Offense’ With Earnings Beat, Raised Outlook

Under Armour Inc. has raised its guidance for the fiscal year following a solid first-quarter earnings and sales beat that suggested its business could be headed for a post-pandemic rebound.

For the three months ended March 31, the company posted adjusted profits of $75 million, or adjusted earnings of 16 cents per share, versus analysts’ predictions of earnings of 4 cents per share. Revenues increased 35% to $1.3 billion, compared with consensus bets of $1.12 billion.

“Under Armour is off to an excellent start for the year,” president and CEO Patrik Frisk said in a statement. “Our first-quarter results demonstrate that our improved operating model and investments we’re making to amplify our connection with consumers are enabling us to deliver against strong demand for our brand.”

The sportswear giant saw revenues in its home turf of North America rise 32% to $806 million, while its international business recorded a 58% gain to $452 million. Sales fell 9% in Latin America but advanced 41% in the Europe-Middle East-Africa region and 120% in Asia-Pacific.

By channel, wholesale revenues improved 35% to $800 million and direct-to-consumer surged 54% to $437 million, driven by 69% growth in e-commerce. Category-wise, apparel sales climbed 35% to $810 million, footwear spiked 47% to $309 million and accessories jumped 73% to $117 million.

At the end of the quarter, Under Armour had cash and equivalents of roughly $1.3 billion and no borrowings outstanding under its $1.1 billion revolving credit facility.

The athletic chain — which resorted to mass furloughs, slashed executive pay and took other cost-cutting measures following government-mandated store closures in the same period last year — also raised its outlook for 2021.

Now, it anticipates revenues to be up at a high-teen percentage rate, compared with the previous prediction of a high-single-digit percentage rate increase. The new guidance reflects a high-teen percentage growth rate in North America and low-30s percentage growth rate in the international business. Adjusted earnings per share are expected to be in the range of 28 cents to 30 cents, versus the previous forecast of adjusted earnings per share in the range of 12 cents to 14 cents.

“With a solid balance sheet and well-managed inventory,” added Frisk, “we’re confident in our ability to drive well through 2021 as we get back on offense and make measured progress to returning to sustainable, profitable growth over the long term.”

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