Ecommerce growth drives Under Armour's holiday quarter sales

For the fourth quarter, Under Armour revenue was down 3 percent to 1.4 billion dollars. The company said, wholesale revenue decreased 12 percent to 662 million dollars and direct-to-consumer revenue increased 11 percent to 655 million dollars, driven by 25 percent growth in ecommerce. Net income for the quarter was 184 million dollars, while adjusted net income was 55 million dollars and diluted earnings per share were 40 cents, while adjusted diluted earnings per share were 12 cents.

“Improving brand strength and consistent operational execution delivered better than expected results in the fourth quarter,” said Under Armour President and CEO Patrik Frisk in a statement.

Highlights of Under Armour’s fourth quarter results

The company added that North America revenue decreased 6 percent to 924 million dollars and international revenue increased 7 percent or 4 percent currency neutral to 448 million dollars. Within the international business, revenue decreased 11 percent in EMEA, down 14 percent currency neutral), increased 26 percent in Asia-Pacific, up 21 percent currency neutral), and increased 2 percent in Latin America, up 8 percent currency neutral).

Fourth quarter apparel revenue decreased 4 percent to 931 million dollars, footwear revenue declined 7 percent to 241 million dollars and accessories revenue increased 32 percent to 145 million dollars.

Gross margin increased 210 basis points to 49.4 percent compared to the prior year, while adjusted gross margin increased 300 basis points to 50.3 percent. Operating income was 56 million dollars and adjusted operating income was 120 million dollars.

Under Armour’s FY20 performance and FY21 outlook

The company further said that full year revenue was down 15 percent to 4.5 billion dollars. Wholesale revenue decreased 25 percent to 2.4 billion dollars and direct-to-consumer revenue increased 2 percent to 1.8 billion dollars, driven by 40 percent growth in ecommerce, which represented 47 percent of total direct-to-consumer revenue.

North America revenue decreased 19 percent to 2.9 billion dollars and international revenue decreased 4 percent to 1.4 billion dollars. Within the international business, revenue decreased 4 percent in EMEA, down 5 percent currency neutral, decreased 1 percent in Asia-Pacific or down 2 percent currency neutral, and decreased 16 percent in Latin America or down 10 percent currency neutral. Apparel revenue decreased 17 percent to 2.9 billion dollars, footwear revenue declined 14 percent to 934 million dollars and accessories revenue was relatively flat at 414 million dollars.

Gross margin increased 140 basis points to 48.3 percent, while adjusted gross margin increased 170 basis points to 48.6 percent. Operating loss was 613 million dollars and adjusted operating income was 537 thousand dollars. Net loss for the year was 549 million dollars and adjusted net loss was 120 million dollars, while diluted loss per share was 1.21 dollars and adjusted diluted loss per share was 26 cents.

For full year 2021, Under Armour expects revenue to be up at a high-single-digit percentage rate, reflecting a high single-digit growth rate in North America and a high-teens growth rate in the international business, gross margin to be up slightly versus the prior year adjusted gross margin rate of 48.6, operating income is to reach 5 million to 25 million dollars and adjusted operating income to reach 130 million dollars to 150 million dollars and diluted loss per share to be about 18 cents to 20 cents and adjusted diluted earnings per share in the range of 12 cents to 14 cents.