Under armaments, the outlook for the year as a whole rises and demand is returning
Shoppers pass an Under Armor store in White Plains, New York.
Scott Mlyn | CNBC
Under Armor on Tuesday raised its full-year sales and earnings outlook as the sportswear maker sees demand for its brand return and buyers return to its stores.
The company posted revenue growth of 35% in the first quarter, exceeding analysts’ expectations. A year earlier, the company had gone through a period of temporarily closing its stores, and Under Armor had to turn to layoffs and other cost-cutting measures to deal with the health crisis.
The share rose by more than 3% in premarket trading.
Here’s how the company performed in its quarter ended March 31, compared to analyst expectations based on a refinitive survey:
- Earnings per share: 16 cents adjusted compared to 3 cents expected
- Revenue: $ 1.26 billion versus $ 1.13 billion expected
Under Armor’s net income rose to $ 77.8 million, or 17 cents per share, compared to a loss of $ 589.7 million, or $ 1.30 per share, last year.
With no one-off costs, the company earned 16 cents per share, better than the 3 cents that analysts estimated from Refinitiv to be expected.
Revenue rose to $ 1.26 billion from $ 930.2 million last year, beating estimates of $ 1.13 billion.
In North America, sales rose 32% while Under Armour’s smaller international division grew 58%, driven by the recovery in markets like China.
Online sales grew 69% across the company.
CEO Patrik Frisk said the company sees strong demand for the brand as business rebounds in Asia and North America. In the same period last year, Under Armor’s sales fell more than 20% as its business was hit by the coronavirus pandemic and stores closed, freezing turnaround efforts.
The company has also worked to manage its inventory levels and reduce reliance on discounts to get rid of obsolete goods. Frisk said these efforts are paying off and helping to grow profits.
Under Armor now expects full year sales to increase by a large percentage of teenagers compared to its previous high-single-digit increase outlook. According to a refinitive survey, analysts were aiming for growth of 10.1%.
Adjusted earnings per share for 2021 are expected to be in the 28 to 30 cents range, compared to an earlier range of 12 to 14 cents. Analysts had asked for earnings per share of 20 cents.
Under Armor expects fees of $ 35 million to $ 40 million in the second quarter related to the ongoing restructuring.
On Monday, Under Armor agreed to pay the Securities and Exchange Commission $ 9 million to pay fees that misled investors from 2015 to 2016 by posting revenue of $ 408 million, which is expected will be completed in the coming quarters.
The retailer paid the fees without approving or denying the findings in the SEC’s order. Under Armor had also responded to requests from the U.S. Department of Justice for documents and information, announcing on Monday that the DOJ had not received any requests since the second quarter of 2020.
At the close of trading on Monday, Under Armor stocks were up more than 40% since the start of the year. The company has a market capitalization of $ 10 billion.
The full press release on Under Armor’s earnings can be found here.
WATCH LIVE: Under Armor CEO Patrik Frisk will be interviewing CNBC’s Closing Bell in an exclusive TV interview on Tuesday at 3pm