Under Armour on Tuesday raised its gross sales and revenue outlook for the complete yr, because the sports activities attire maker sees demand for its model roaring again with customers returning to its shops.
It reported first-quarter gross sales development of 35%, topping analyst expectations. The firm is lapping a interval a yr earlier, when its shops have been briefly shut and Under Armour needed to flip to layoffs and different cost-cutting measures to combat by way of the well being disaster.
“On a two-year stack, that is skipping over 2020, we’re running a better, higher quality and more profitable business,” CEO Patrik Frisk stated throughout an earnings convention name.
Under Armour’s inventory was down 1.6% after leaping greater than 3% in premarket buying and selling.
Here’s how the corporate did throughout its quarter ended March 31 in contrast with what analysts have been anticipating, primarily based on a Refinitiv survey:
- Adjusted Earnings per share: 16 cents vs. 3 cents anticipated
- Revenue: $1.26 billion vs. $1.13 billion anticipated
Under Armour’s web earnings grew to $77.8 million, or 17 cents per share, in contrast with a lack of $589.7 million, or $1.30 per share, a yr earlier.
Excluding one-time prices, the corporate earned 16 cents per share, higher than the three cents that analysts have been anticipating, primarily based on Refinitiv estimates.
Sales rose to $1.26 billion from $930.2 million a yr earlier, beating estimates for $1.13 billion.
In North America, gross sales have been up 32%, whereas they grew 58% in Under Armour’s smaller worldwide division, boosted by recoveries in markets that embody China.
Online gross sales rose 69% throughout the enterprise.
Frisk stated the corporate is seeing sturdy demand for the model, as enterprise rebounds throughout Asia and North America. In the year-earlier interval, Under Armour’s gross sales tumbled greater than 20%, as its enterprise took a blow from the coronavirus pandemic and its shops have been pressured shut, freezing its turnaround efforts.
The firm has additionally labored on managing its inventories and lowering its reliance on discounting to eliminate dated merchandise. Frisk stated these efforts are paying off and serving to to spice up earnings.
BMO Capital Markets analyst Simeon Siegel stated he expects demand at Under Armour to be a beneficiary from “the current trifecta of stimulus, vaccines and light industry-wide inventory.”
“We believe margin growth is very real and sustainable,” Siegel stated in a word to shoppers Tuesday.
In its second quarter, Under Armour stated gross sales ought to rise upwards of 70%, led by the strongest development in North America and Latin America, as the corporate laps extra pandemic-related closures in 2020.
The firm expects to comprehend roughly $35 million to $40 million in restructuring prices throughout the quarter.
With these improved traits, Under Armor raised its annual forecast. It now expects full-year income to rise by a high-teen proportion fee, in contrast with a earlier outlook of a high-single-digit improve. Analysts had been in search of 10.1% development, in response to a Refinitiv survey.
It’s calling for 2021 adjusted earnings per share to be within the vary of 28 cents to 30 cents, in contrast with a previous projection of 12 cents to 14 cents. Analysts had been calling for earnings per share of 20 cents.
On Monday, Under Armour stated it agreed to pay $9 million to settle Securities and Exchange Commission charges that it mislead investors from 2015 to 2016 by recording $408 million in gross sales that it anticipated to finish in future quarters.
The retailer settled the costs with out admitting or denying the findings within the SEC’s order. Under Armour, which had additionally been responding to requests for paperwork and data from the Department of Justice, stated Monday it hasn’t obtained any requests from the DOJ because the second quarter of 2020.
As of Monday’s market shut, Under Armour shares are up extra about 40% yr thus far. The firm has a market cap of $10 billion.
WATCH LIVE: Under Armour CEO Patrik Frisk will be part of CNBC’s “Closing Bell” for an unique TV interview on Tuesday at 3 p.m. ET