Pandemic powers Under Armour online sales, surprise profit

Online demand for Under Armour’s apparel and accessories, and stronger Asia-Pacific sales helped it post a surprise holiday-quarter profit and top revenue estimates on Wednesday, sending its shares up 5% in premarket trade.

The company said revenue in its Asia-Pacific market jumped 26%, cushioning a sharp decline in its Europe, Middle East, and Africa (EMEA) market, where several stores have been closed due to a resurgence in COVID-19 cases.

While the health crisis has led to a fall in attendance at gyms, it has given people more time to workout at home or opt for outdoor exercises including running and biking, leading to a rise in demand for training shoes, running shorts and t-shirts.

With shoppers still limiting trips outside their homes, a large chunk of that demand has come from people shopping online. Under Armour said its e-commerce sales rose 25%, helping its high-margin direct-to-consumer segment jump 11%.

Overall revenue fell about 3% to $1.40 billion in the three months ended Dec. 31, but topped a Refinitiv IBES estimate of $1.27 billion.

Excluding items, Under Armour posted a surprise profit of 12 cents per share, while analysts were expecting a loss of 7 cents.

The Baltimore-based company reported a net income of $184.5 million, or 40 cents per share, compared with a loss of $15.3 million, or 3 cents per share, a year earlier.

Under Armour also said it expects revenue growth percentage to be in high single-digits in 2021, boosted by growth in its North America as well as international markets, but the forecast fell short of market estimates of a 12.65% growth.

The apparel and shoes maker also forecast 2021 adjusted profit per share to be between 12 cents and 14 cents, in line with estimates.