The products are on display at an Under Armor store in New York City on November 4, 2019.
Brendan McDermid | Reuters
Under Armor reported a surprise profit for the holiday quarter on Wednesday, as sales were driven by strong digital growth.
The shoe maker also offered an initial outlook for 2021. It expects sales to rise to high digits, helped by a rise in consumer demand in North America. Revenue fell 15% in 2020.
Its shares jumped more than 5% in premarket trading.
The following explains how the company did during the fourth quarter compared to what analysts expected, according to a Refinitiv survey:
- Earnings per share: 12 cents, adjusted, against an expected loss of 7 cents
- Revenue: $ 1.4 billion vs. $ 1,272 million, projected
For the fourth quarter, net income grew to $ 184.5 million, or 40 cents per share, compared to a loss of $ 15.3 million, or 3 cents per share, a year ago. Excluding one-time charges, the company earned 12 cents per share, better than the 7-cent loss predicted by analysts.
Sales fell 3% to $ 1.40 billion from $ 1.44 billion a year ago, but surpassed analysts ’estimates of $ 1.27 billion.
Wholesale revenue fell 12%, while Under Armor’s direct consumer business grew 11%, driven by a 25% jump in e-commerce sales. More shoppers visited their website to buy training equipment and other outdoor sports accessories to stay active during the pandemic.
But Under America continued to see weakness in its domestic market, with sales in North America falling 6%. Revenues increased 7% in international markets.
While the pandemic remains uncertain conditions, the company released a forecast for this year, which predicts a loss of 18 cents to 20 cents per share. However, after the adjustments, Under Armor expects to earn between 12 and 14 cents per share. According to Refinitiv, analysts were demanding earnings per share of 13 cents.
The company warned that its health crisis could still affect its prospects. While most of its stores are open, most are not yet fully operational, he said.
Shares of Under Armor have risen about 2% in the last twelve months, following the market close on Tuesday. The company has a market cap of $ 9.42 million.
Find the full Under Armor press release here.