Footwear manufacturer Under Armour Inc (NYSE: UAA) reported better-than-expected fiscal 2021 second-quarter earnings and revenues. The American sports equipment company also raised its FY 2021 outlook. Following the results, the stock gained 6.19% or $1.12 to close at $19.22.
The Maryland-based firm reported second-quarter revenues of $1.351 billion, compared with $707.64 million in the second quarter of 2020.
For the quarter ended June 30th, 2021, Under Armour swung to a profit of $59.207 million, or $0.13 per share, from a loss of $182.895 million, or $0.40 a share, in the quarter ended June 30th, 2020.
Excluding restructuring charges, amortization of debt discount, loss on extinguishment of convertible senior notes, and provision for income taxes, the Q2 2021 net income was $110.022 million, or $0.24 per share. Analysts surveyed by FactSet had anticipated the company to report earnings of $0.06 per share on revenues of $1.218 billion.
Segment-wise,
- Apparel incomes grew 105% y-o-y to $874.193 million.
- Footwear revenues were $342.64 million, up 85.10% from last year.
- Accessories revenues grew 98.7% y-o-y to $111.50 million.
Region-wise,
- North American revenues surged 101.4% y-o-y to $905.493 million.
- EMEA revenues were $207.22 million, an increase of 132.50% on a y-o-y basis.
- Asia-Pacific revenues grew 56.10% y-o-y to $192.369 million.
- Latin America revenues more than tripled to $46.512 million, from $11.147 million.
Wholesale revenue grew 157% to $768 million, while direct-to-consumer revenue rose by 52% to $561 million, led by the robust performance of fully-owned and operated shops. The growth was partly negated by an 18% drop in eCommerce, which accounted for 39% of the aggregate direct-to-consumer business.
Inventory declined 26% to $881 million. At the end of the second quarter, cash and cash equivalents were $1.30 billion. The company had made no borrowings under the $1.10 billion revolving credit facility.
Gross margin rose by 20 basis points to 49.50% on a y-o-y basis, primarily led by gains from pricing and changes in currency exchange rate fluctuations.
Looking forward, for 3Q 2021, Under Armour forecasts an adjusted income of between $0.13 and $0.15 per share. The company anticipates incurring restructuring charges in the range of roughly $40 million to $50 million in the current quarter.
For FY 2021, the company now anticipates adjusted earnings of between $0.50 and $0.52 per share, upwardly revised from the earlier outlook range of between $0.28 and $0.30 per share. Furthermore, the company expects revenues to grow at a low twenty’s percentage, an upward revision from the earlier guidance for high-teens percentage growth. The FactSet consensus calls for adjusted earnings of $0.35 per share on revenues of $5.346 billion, indicating a growth of 19.5%.
The quarterly earnings beat and upward revision of the FY 2021 outlook are expected to keep the stock range-bound with a slight bullish bias.
The historical price chart shows that the stock is ascending after testing the support at 19. The next resistance is anticipated only near 24. Additionally, the stochastics indicator is rising towards the bullish zone. We are expecting the stock to stay in an uptrend in the near term.
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