Under Armour Earnings vs. Expectations
In the Q1 earnings report released by the sportswear company, Under Armour generated $1.3 billion in total revenue. This is a massive step up from the same quarter in the previous fiscal year, roughly translating to an increase of 35%. In combination with a restructuring effort that has helped the company to decrease expenses, the rise in revenues for Under Armour has resulted in a strong net income of $78 million. Compared to the same quarter last year, where the business reported a net loss of $590 million, 2021 is proving to be a massively better year so far.
As a result of the strong revenue for the business, earnings also returned to the positive, with Under Armour reporting diluted earnings of $0.17 per share. This figure represents another major increase for the company after posting a loss of $1.30 per share the year before. The sportswear company also beat out analyst expectations for total earnings, with the consensus on Under Armour only projecting $0.04 per share.
Sales for the sportswear business have been up across almost all product types, with fitness apparel seeing revenue increase by 35%, footwear up by 47%, and accessories up by a whopping 73%. Regionally, the company saw business increase the most in Asia-Pacific, where revenue grew by 120%. North America was another major growth sector, increasing business by 32%.
Future Outlook and Stock Market Reaction
As a result of the Q1 earnings report, Under Armour has upgraded its full outlook for the 2021 fiscal year. Revenue is now expected to rise by a figure in the high teens instead of the high single digits. The sportswear company also now projects an adjusted earnings per share range of $0.28 to $0.30 — an increase of over $0.10 per share.
Both Under Armour Class A and Class C stock are up in early pre-market trading. For Class A stocks, share prices have risen to nearly $25 a share — up over 2.5% from the closing price yesterday. Under Armour Class C stock is up to over $20 a share now, trading comfortably over 3% from market close.
In a statement released alongside the Q1 report, president and CEO of Under Armour Patrik Frisk said, “Under Armour is off to an excellent start for the year. Our first-quarter results demonstrate that our improved operating model and investments we're making to amplify our connection with consumers are enabling us to deliver against strong demand for our brand. Additionally, with a solid balance sheet and well-managed inventory, we're confident in our ability to drive well through 2021 as we get back on offense and make measured progress to returning to sustainable, profitable growth over the long-term.”
About the Author
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.