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Under Armour’s Q3 sales remain flat, forecasts better revenue estimates

By Prachi Singh

30 Oct 2020

Business

Under Armour, Inc., for the third quarter, reported that revenue was flat at 1.4 billion dollars compared to the prior year. The company said, gross margin decreased 40 basis points to 47.9 percent, operating income was 59 million dollars, while adjusted operating income was 133 million dollars. The company added that net income was 39 million dollars, adjusted net income was 118 million dollars, diluted earnings per share were 9 cents and adjusted diluted earnings per share were 26 cents.

“Our third-quarter results reflect considerably better than expected performance due to higher demand and our strong execution, especially in North America,” said Under Armour President and CEO Patrik Frisk in a statement.

Highlights of Under Armour’s Q3 and 2020 outlook

The company’s wholesale revenue decreased 7 percent to 830 million dollars and direct-to-consumer revenue increased 17 percent to 540 million dollars, driven by continued strong growth in ecommerce.

North America revenue decreased 5 percent to 963 million dollars and international revenue increased 18 percent or 17 percent currency neutral to 433 million dollars. Within the international business, revenue increased 31 percent or 26 percent currency neutral in EMEA, increased 15 percent or 16 percent currency neutral in Asia-Pacific and decreased 15 percent or 7 percent currency neutral in Latin America.

Under Armour further said that apparel revenue decreased 6 percent to 927 million dollars, footwear revenue increased 19 percent to 299 million dollars and accessories revenue increased 23 percent to 145 million dollars.

The company said that for the full-year 2020, revenue is expected to be down at a high-teen percentage rate compared to 2019 results, reflecting a low twenties percentage rate decline in North America and a high-single-digit percentage rate decline within the international business. For the fourth quarter, the company now expects revenue to be down at a low-teen percentage rate, versus the previous down 20 to 25 percent expectation, an anticipated substantial decline in licensing revenue, gross margin to be up 20 to 40 basis points.

For the fourth quarter, the company anticipates meaningful gross margin pressure primarily related to expectations around a more promotional environment relative to the prior year, operating loss is expected to reach approximately 800 million dollars to 860 million dollars, while adjusted operating loss is expected to reach approximately 140 million dollars to 150 million dollars and adjusted diluted loss per share is expected to be in the range of 47 cents to 49 cents.

Picture:Under Armour newsroom