Kevin Plank, CEO, Under Armour
Under Armour on Thursday reported quarterly earnings and sales that topped analysts’ expectations, sending its stock higher. It also raised its profit outlook for 2019.
The athletic apparel retailer reported earnings of 5 cents a share for the first quarter ended March 31 on sales of $1.21 billion. Analysts were calling for Under Armour to break even on a per-share basis, with sales of $1.18 billion, according to Refinitiv data.
Under Armour shares jumped more than 5% in premarket trading on the news. As of Wednesday’s market close, the stock had climbed about 24% so far this year.
Under Armour updated its earnings outlook for the full year 2019, now expecting annual earnings to fall within a range of 33 to 34 cents per share, compared with a prior range of 31 to 33 cents. It’s still calling for revenues to be up roughly 3 to 4% overall, with sales growth remaining “relatively flat” in North America.
Sales in North America were down 3% during the first quarter, amounting to $843 million, while international revenues grew 12%, to $328 million.
The sneaker maker has been grappling with how to grow U.S. sales amid a landscape flush with competition from Adidas, Nike and Lululemon. Part of its efforts to turn things around have included cutting staff, trimming excess inventory sitting in warehouses and promising a bigger focus on new shoes and women’s items. Some of its best-selling footwear brands of late include Project Rock, Curry 6 and the Hovr sneakers.
Meantime, CEO Kevin Plank has said the company plans to stay true to its “performance” gear, despite “athleisure” gaining more momentum in the U.S. Some analysts say Under Armour is struggling because the company is choosing not to pivot toward the yoga pants and casual wear trend.
Under Armour also recently lost its North American president, Jason LaRose, with COO Patrik Frisk filling the position until a replacement is found.
Under Armour said in a separate press release Thursday that it’s adjusted its year-ago financial results to reflect changes in how accounts for some corporate expenses. Costs related to its headquarters and supply chain upgrades will now be excluded from its operating segments. As a result, Under Armour said it has revised its targets for these segments to reflect the changes.