Sports apparel and equipment company Under Armour Inc. (UA, Financial)(UAA, Financial) reported strong first-quarter results before the opening bell on Tuesday.
Boosted by rising sales for its products after the Covid-19 pandemic put a damper on sports and other athletic activities last year, the Baltimore-based company saw its net income improve from $589.7 million to $77.8 million. For the three months ended March 31, it posted adjusted earnings of 16 cents per share, crushing Refinitiv's estimates of 3 cents.
Revenue grew 35% from the prior-year quarter to $1.26 billion, topping expectations of $1.13 billion, as demand began to rebound in North America and Asia after having to close stores, lay off employees and implement other cost-cutting measures in 2020 to fight the negative impacts from the health crisis.
As its stores began to reopen and sporting events resumed, sales in Under Armour's North America division increased 32% to $806 million, while international sales grew 58% to $452 million.
Online sales rose 69% across the business.
By product category, Under Armor saw the largest sales increase in accessories, which recorded 73% growth to $117 million. In addition, apparel revenue climbed 35% to $810 million and footwear sales rose 47% to $309 million.
In a statement, President and CEO Patrik Frisk noted the company is "off to an excellent start for the year" as its restructuring plan, which was put on hold as a result of the pandemic, has begun to improve profitability and cash flow.
"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," he said. "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."
As a result of these trends, Under Armour raised its outlook for 2021. It now expects full-year revenue to grow by a high-teen percentage, while previously it was anticipating a high single-digit increase. Refinitiv analysts were projecting 10.1% growth.
Similarly, earnings per share, which were previously forecasted to range from 12 cents to 14 cents, are now expected to be between 28 cents and 30 cents for the year. Analysts had set a target of 20 cents per share.
After rallying 3% in premarket trading, both the Class A and Class C shares retreated. On Tuesday morning, the Class A stock was down 3.81% at $23.25 while the Class C stock declined 2.8% to $19.33. GuruFocus estimates both classes of Under Armour's stock have advanced over 30% year to date.
Disclosure: No positions.
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