Under Armor (UAA) reports earnings for the third quarter of 2021

Under Armor clothing on display in a sports shop.

Justin Sullivan | Getty pictures

Under the Armor shares, pre-market trading rose sharply on Tuesday as strong financial earnings in the third quarter revealed that the sportswear manufacturer is seeing progress in improving its brand image under CEO Patrik Frisk.

With increased demand for its sneakers and sweat-transporting clothing, Under Armor said it now expects sales to increase by 25% from 2020, topping the previous outlook.

Frisk has tried to improve Under Armor’s image by increasing marketing costs and pulling inventory out of discount channels to sell more at full price.

The company’s share recently rose around 9%.

Here’s how Under Armor fared compared to what analysts surveyed by Refinitive expected:

  • Earnings per share: 31 cents adjusted against the expected 15 cents
  • Revenue: $ 1.55 billion versus expected $ 1.48 billion

Net income for the three-month period ending Sept. 30 rose to $ 113.4 million, or 24 cents per share, compared to $ 38.9 million, or 9 cents per share, a year earlier. Excluding non-recurring items, Under Armor earned 31 cents per share, more than double the 15 cents per share analysts expected.

Revenue rose 8% to $ 1.55 billion from $ 1.43 billion the year before. Analysts had expected sales of $ 1.48 billion.

Wholesale sales increased 10%, while direct sales to consumers increased 12%. Online sales fell 4% year-on-year as pandemic-driven e-commerce activity declined.

Sales in North America increased 8%, while international revenue increased 18%. Within Under Armour’s international segment, sales increased by 19% in the Asia-Pacific region, 15% in the Europe, Middle East and Africa division and 27% in Latin America.

The results are the latest sign that its pursuit of more profitable sales is on track. Frisk has been at the helm since January 1, 2020, when he was tasked with reversing a sales decline. In a competitive landscape, Under Armor lost ground to rivals like Nike and Lululemon.

While other retailers have been hurt by factory closures in Vietnam, a hub for clothing manufacturing, Under Armor raised no concerns about supply chain problems. About 68% of its clothing and accessories are made in Vietnam, Jordan, Malaysia and China.

For the financial year 2021, Under Armor said that earnings per. share will reach around 74 cents, on an adjusted basis, compared to its previous estimate of 50 cents to 52 cents.

Revenue is estimated to increase by about 25% compared to its previous forecast for an increase in the low twenties.

Analysts had predicted that Under Armor would earn 55 cents per share, on an adjusted basis, on sales of $ 5.5 billion.

Under the Armor shares have risen about 28% year to date, from Monday’s market close. The company has a market capitalization of $ 10.3 billion.

Find the full earnings press release from Under Armor here.

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