had strong revenue and earnings in the third quarter on Tuesday, beating Wall Street’s expectations.
Even better: The sportswear company said the outlook was very bright for year-round earnings.
That caused shares in Under Armor to rise. The company’s Class A shares (ticker: UAA) jumped 17% to $ 25.76 in dinner trading on Tuesday, and Class C shares (UAA) – which do not have voting rights – also rose about the same amount.
“I think every time you face a constraint, it forces you to make choices,” CEO Patrik Frisk said in an interview with investors Tuesday morning. “I think these limitations help us (make the right priorities) and ultimately help us drive our premiumization.”
Under Armor reported revenue of $ 1.5 billion in the third quarter, an 8% increase over the same period a year ago and slightly ahead of analysts’ consensus estimates, according to FactSet. Revenue growth was strongest in the Asia-Pacific region, where sales increased 19%, and Latin America, where growth was 27%.
Under Armor’s adjusted earnings in the third quarter were 31 cents per share, which clearly exceeded expectations of 15 cents. Operating income for the quarter was $ 172 million, with the company’s gross margin rising 3.1 percentage points to 51%.
The prospect is where it will get really good.
Revenue growth, the company said, is expected to be 25% for the full year, up from previous guidance of a low-20s percentage increase. Margins are expected to grow by 1.3 percentage points, up from previous guidance of an improvement of 50 to 70 basis points compared to last year’s adjusted gross margin of 48.6%.
Operating income is expected to hit $ 425 million compared to previous guidance at a range of $ 215 million to $ 225 million, with adjusted earnings of 74 cents per share. stock that is above a previously suggested range of 50 cents to 52 cents.
Several investors on the call asked Frisk about the company’s marketing goals going forward, and he replied that Under Armor remains consumer-focused. Frisk said its return on investment has improved consumer data, enabling the company to better serve its customers.
These investments will continue into 2022, Chief Financial Officer David Bergman said in the call.
Under Armor is a purchase thanks to its product strength, analysts at Jefferies wrote in a note Tuesday morning. “We continue to believe that 2021 is the turning point for Under Armor,” analysts wrote. “Discipline has returned to the company, the product has improved, the athletics / leisure industry is even stronger, and the Under Armor brand has regained its momentum.”
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