Under Armour’s restructuring efforts are beginning to pay dividends and Wall Street likes it.
On Wednesday morning, the Baltimore-based sports brand reported net income for the period ended Dec. 31 rose to $184.5 million, or 40 cents a share, compared with a loss of $15.3 million, or 3 cents a share, a year ago. Total sales dipped 3 percent to $1.40 billion from $1.44 billion in the year-ago period, but topped analyst estimates of $1.27 billion. E-commerce sales rose 25 percent.
The surprise profit led to a pre-market jump of 6.6 percent in Under Armour’s share price to $18.70.
By region, North America and EMEA (Europe, the Middle East and Africa) sales declined 6 percent to $924 million and 11 percent to $655 million, respectively, while overall international revenue rose 7 percent to $448 million, sparked by a 26 percent jump in Asia-Pacific and 2 percent increase in Latin America.
Apparel revenue decreased 4 percent to $931 million and footwear revenue dropped 7 percent to $241 million in the period while accessories revenue increased 32 percent to $145 million.
“Improving brand strength and consistent operational execution delivered better than expected results in the fourth quarter,” said Under Armour president and chief executive officer Patrik Frisk. “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.”
Frisk said that as Under Armour continues 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.”
This led the company to project a revenue gain in the high single digits for the full year of 2021, with North America expected to grow in the high single digits and international in the high teens. Operating income is expected to reach $5 million to $25 million. Excluding the impact of continued restructuring efforts, adjusted operating income is expected to reach $130 million to $150 million, the company said.
For the year, Under Armour reported a net loss of $549 million on a 15 percent drop in sales to $4.5 billion. North America revenue decreased 19 percent to $2.9 billion and international revenue fell 4 percent to $1.4 billion with the EMEA down 4 percent, Asia-Pacific down 1 percent and Latin America down 16 percent. Apparel revenue decreased 17 percent to $2.9 billion, footwear revenue declined 14 percent to $934 million, and accessories revenue was flat at $414 million.