Under Armour Stock Jumps on Quarterly Earnings and Sales Beat Despite COVID Challenges

Shares of Under Armour Inc. climbed in the mid- to high single-digits in Wednesday premarket trading after the athletic giant delivered a fourth-quarter earnings and sales beat.

For the three months ended Dec. 31, the Baltimore-based company posted an adjusted net income of $54.5 million, or adjusted earnings per share of 12 cents, compared with analysts’ bets of a loss of 5 cents per share. Revenues declined 2.6% to $1.4 billion, while market watchers predicted sales of $1.25 billion.

As of 8:30 a.m. ET, its stock advanced 8% to $22.

“Improving brand strength and consistent operational execution delivered better-than-expected results in the fourth quarter,” president and CEO Patrik Frisk said in a statement. “Our global team was exceptionally resilient and disciplined amid a highly challenging year which included the COVID-19 pandemic and, for Under Armour, a comprehensive restructuring effort including further operating model refinements.”

While Under Armour’s wholesale business decreased 12% to $662 million, its direct-to-consumer sales rose 11% to $655 million, driven by 25% growth in e-commerce. On its home turf of North America, where roughly 95% of stores are operational, revenues fell 6% to $924 million. International sales also dropped 7% to $448 million — with the Europe-Middle East-Africa region down 11%, but the Asia-Pacific and Latin America areas up a respective 26% and 2%.

By category, footwear revenues tumbled 7% to $241 million and those of apparel fell 4% to $931 million. Accessories, on the other hand, saw gains of 32% to $145 million.

The sportswear brand also noted that, while traffic trends within its owned retail locations “remain challenged,” conversion trends are still “strong.” Additionally, it shared that it experienced “significant e-commerce growth” around the world during both the fourth quarter and the fiscal year.

“As we continue to navigate uncertainty around the pandemic, we remain focused on execution and the efforts necessary to stabilize our business further and improve our ability to deliver sustainable shareholder value over the long-term,” added Frisk.

Outlining its full-year 2021 outlook, Under Armour anticipates revenues to be up at a high single-digit percentage rate, reflecting a high single-digit growth rate in North America and a high teens growth rate in its international business. It forecasts adjusted earnings per share to be in the range of 12 cents to 14 cents.

At the end of 2020, the company had cash and equivalents of $1.5 billion, including $199 million in net cash proceeds from the sale of MyFitnessPal to Francisco Partners. (The transaction — valued at $345 million — was completed on Dec. 18.) No borrowings were outstanding under its $1.1 billion revolving credit facility.

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