Under Armour Beats out Wall Street Expectations as Company Posts Strong Earnings in Q4 Report

By Thomas Price Wednesday, February 10, 2021

The COVID-19 pandemic has caused several major industries to suffer over the course of the past year. Without question, the fitness apparel business has struggled as companies have had a hard time maintaining sales, especially as gyms shut down or began operating at limited capacity. However, one fitness apparel company has finally begun to recover. Under Armour recently posted their quarterly report, and the results blew Wall Street expectations out of the water. The company posted a profit in the quarter despite nearly all analysts predicting a net loss, and in turn, Under Armour saw its stock rise massively in pre-market trading.

Under Armour corporate office building.

Under Armour’s Surprising Q4 Report

In Under Armour’s Q4 report, the fitness apparel and accessory company posted better than expected results across the board as the holiday sales bump and ecommerce revenue pushed them into profits. In Q4, the company reported a strong $1.4 billion in revenue, beating out analyst expectations, which had the business only earning $1.27 billion in the quarter. Perhaps more impressively, the sports and fitness business generated earnings of $0.12 per share. This was a major overachievement for the fitness apparel company as most experts had not only been predicting less but were predicting a loss of $0.07 per share.

Much of the success that Under Armour saw in Q4 can be attributed to the company’s massive restructuring plan that they began in 2020 and the large boost in ecommerce sales. The company had previously announced a $600 million business restructuring plan in order to increase profitability and improve cash flow. This business plan has clearly come to fruition to some extent in Q4. Along with the restructuring plan, as the fitness apparel company is still operating physical retail locations at limited capacity, Under Armour made up serious ground with ecommerce and digital sales as the company reported a 25% increase in Q4.

The surprising earnings per share and overperforming revenue from Under Armour was well received by investors who rallied this morning to push the company’s stock upward in pre-market trading.

Under Armour’s Stock Rise and Future Outlook

In pre-market trading this morning, the business saw its stock price rise by over 8%. This rally has pushed the company’s value to nearly $19 per share. In the meantime, Under Armour has also released guidance on 2021 with a cautious but optimistic outlook. The business expects to see further increases in revenue as well as earnings per share somewhere between $0.12 and $0.14.

In a statement released with the Q4, CEO and President of the business Patrick Frisk said, “Improving brand strength and consistent operational execution delivered better than expected results in the fourth quarter. 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.”

About the Author

Headshot of Thomas Price

Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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