Under Armour Rebound Continues as North American Sales Recover
Under Armour continued on its recovery path Friday, reporting sales and earnings that exceeded projections for the fourth quarter and year.
The Baltimore-based activewear brand has been in the midst of a restructuring since Patrik Frisk took over the top post two years ago and refocused the company on its historic strength: sports apparel and accessories.
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On Friday, before the market opened, Under Armour reported net income for the quarter ended Dec. 31 of $110 million, or 23 cents a share, compared with $184.5 million, or 40 cents a share, a year earlier. There were $14 million in restructuring and impairment charges in the quarter, so excluding one-time items, it earned 14 cents a share, beating analysts’ estimates of 7 cents.
Sales overall rose 9 percent to $1.5 billion which the company attributed to a “solid performance” in its owned and operated stores and a 4 percent growth in e-commerce, which represented 42 percent of its total direct-to-consumer business during the quarter.
In North America, the results were even better, with sales increasing 15 percent to $1.1 billion. But it was a mixed bag Internationally where overall revenue increased 3 percent to $461 million, with a 24 percent gain in EMEA but a 6 percent decline in Asia Pacific and a 22 percent drop in Latin America.
Apparel revenues in the quarter increased 18 percent to $1.1 billion, while footwear sales rose 17 percent to $283 million, the company said. Accessories revenue, however, decreased 27 percent to $107 million.
“The final quarter of 2021 demonstrated the power and consistency of Under Armour’s strategic playbook, which allowed us to capitalize on improving brand strength and consumer demand,” said Frisk, Under Armour’s president and chief executive officer. “By staying hyper-focused on operational excellence and serving the needs of athletes, we were able to deliver record revenue and earnings results for the full year.
“Amid a dynamic environment with ongoing COVID-19 impacts and resultant supply chain headwinds, I am proud of how consistently our global teams continue to execute our plan,” Frisk added. “As we navigate ongoing uncertainty in the marketplace, we remain focused on delivering industry-leading innovations, premium experiences and empowering those who strive for more. Going forward, I am confident that we are running a stronger company — one that is able to deliver sustainable, profitable growth and value creation for our shareholders over the long term.”
For the full year, Under Armour reported net income of $360 million on a 27 percent gain in sales to $5.7 billion. Wholesale revenue increased 36 percent to $3.2 billion, and direct-to-consumer sales increased 26 percent to $2.3 billion. In North America, full-year sales rose 29 percent to $3.8 billion while international revenue increased 34 percent to $1.9 billion with a 41 percent jump in the EMEA, a 32 percent rise in Asia Pacific and an 18 percent increase in Latin America. Apparel revenue increased 33 percent to $3.8 billion while footwear revenue rose 35 percent to $1.3 billion. Accessories revenue increased 12 percent to $462 million.
Although Under Armour raised its outlook for the quarter ending March 31 with expected operating income of between $30 million and $35 million and a percentage revenue increase in the mid-single digits — up from the low-single digit rate it had previously anticipated — it still warned of “headwinds related to reductions in our spring 2022 order book from supply constraints associated with ongoing COVID-19 pandemic impacts.”
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