The products will be on display in an Under Armor store in New York City on November 4, 2019.
Brendan McDermid | Reuters
Under Armor reported a surprise profit for the vacation quarter on Wednesday, with sales boosted by strong digital growth and spending control.
Despite the uncertainty caused by the pandemic, the sportswear company also offered an initial outlook for 2021. Sales are expected to grow in the high single digits, supported by a recovery in consumer demand in North America. Sales fell 15% in 2020.
Its shares rose more than 8% in premarket trading.
Here’s how the company performed in the fourth quarter compared to analyst expectations, based on a survey by Refinitiv:
- Earnings per share: 12 cents, adjusted against an expected loss of 7 cents
- Revenue: $ 1.4 billion versus $ 1.27 billion
In the fourth quarter, net income rose to $ 184.5 million, or 40 cents per share, compared to a loss of $ 15.3 million, or 3 cents per share, last year.
The company previously announced a $ 550 million to $ 600 million restructuring plan aimed at improving profits and cash flow. In the fourth quarter, pre-tax charges of $ 62 million were recorded related to this plan. With no one-off costs, the company made 12 cents per share, better than the 7-cent loss forecast by analysts.
Revenue declined 3% from $ 1.44 billion last year to $ 1.40 billion, but exceeded analysts’ estimates of $ 1.27 billion.
Wholesale sales fell 12% while Under Armor’s direct customer business grew 11%, driven by a 25% increase in ecommerce sales. Additional shoppers visited the site to purchase exercise equipment and other outdoor sports accessories to help keep them active during the pandemic.
However, the company saw more weakness on its domestic turf, with North American sales falling 6%. In international markets, sales increased by 7%.
Although the pandemic continues to make conditions uncertain, the company released a forecast for this year that projects a loss per share of 18 to 20 cents. After adjustments, however, Under Armor expects earnings of 12-14 cents per share. According to Refinitiv, analysts had asked for adjusted earnings per share of 13 cents.
The company warned the pandemic could continue to affect its prospects. Although most stores are open, only a few are at full capacity.
For the first quarter of 2021, Under Armor is demanding a sales increase of around 20% compared to the previous year.
The company also announced on Wednesday that its board of directors has approved a change to its fiscal year ended March 31, from December 31 to April 31, 2022.
Under Armor stocks were up about 2% in the past 12 months at close of trading on Tuesday. The company has a market capitalization of $ 9.42 billion.
The full Under Armor press release can be found here.