Products are displayed in an Under Armour retailer in New York City, November 4, 2019.
Brendan McDermid | Reuters
CEO Patrik Frisk cited larger demand for the athletic attire maker’s merchandise, particularly in North America, for the better-than-expected efficiency.
Its share value surged greater than 7% in premarket buying and selling.
The firm has been working to get again to progress on its house turf. It has been closely reliant prior to now on malls and low cost chains to promote its gear, a technique that has harm profitability and diluted the model’s picture in contrast with opponents together with Nike, Adidas and Lululemon. But the pandemic results — extra shoppers procuring on-line and searching for garments and footwear to exercise in — are giving Under Armour a welcomed enhance.
The query is, although, how lengthy will it final?
Under Armour supplied Wall Street a extra upbeat outlook for 2020: It now expects full-year income to be down by a high-teen proportion fee. Previously, it had been calling for a drop of 20% to 25% within the second half of the yr. Its new outlook, although nonetheless a decline, is best than the 25.7% drop that analysts had predicted.
Also Friday, Under Armour mentioned it agreed to promote its MyFitnessPal exercise platform to private-equity agency Francisco Partners, in a deal valued at as much as $345 million.
Here’s how the corporate did throughout its fiscal third quarter, in contrast with what analysts had been anticipating, based mostly on Refinitiv information:
- Earnings per share: 26 cents, adjusted, vs. three cents anticipated
- Revenue: $1.43 billion vs. $1.16 billion anticipated
For the quarter ended Sept. 30, web revenue shrank to $38.9 million, or 9 cents per share, from $102.three million, or 23 cents a share, a yr earlier. Excluding one-time expenses, it earned 26 cents per share, topping expectations for three cents, based on Refinitiv estimates.
Revenue was about flat from a yr earlier, at $1.43 billion, outpacing estimates for $1.16 billion.
In North America, income fell 5% to $963 million, whereas worldwide sales elevated 18% to $433 million.
Apparel sales dropped 6% to $927 million, whereas footwear income surged 19% to $299 million, and equipment income jumped 23% to $145 million. The firm mentioned the enhance in footwear is due partly to the launch of its first-ever, ladies’s-specific basketball sneaker throughout the quarter.
Under Armour’s direct-to-consumer enterprise, which incorporates sales from its web site and shops, grew 17% yr over yr. It mentioned its e-commerce enterprise globally grew greater than 50% throughout the quarter.
Increasingly, Under Armour’s technique has been to promote extra on to prospects versus via wholesale companions like malls. Its wholesale income decreased 7% to $830 million throughout the third quarter.
Under Armour mentioned it plans to be extra worthwhile this yr in contrast with 2019 because it funnels much less stock via off-price channels. It did warning, although, that income will likely be pressured throughout the fourth quarter as a result of aggressive promotions across the holidays.
Under Armour’s share value as of Thursday’s market shut was down about 36% this yr, giving the corporate a market cap of $6.three billion.
Correction: The year-to-date decline of about 36% was for Under Armour’s share value. An earlier model misstated the class.