Under Armour, the popular clothing and accessories brand, pleasantly surprised investors with its impressive performance during the holiday quarter. Despite the challenges brought on by the COVID-19 pandemic, the company exceeded revenue expectations and even managed to report a profit. This success can be attributed to the increasing demand for online shopping and solid sales in the Asia-Pacific market.

As the pandemic caused a decline in gym attendance, consumers turned to alternative exercise options like at-home workouts and outdoor activities such as running and biking. This shift in behavior led to a surge in demand for training shoes, running shorts, and t-shirts – products that Under Armour specializes in.

With people remaining cautious about leaving their homes, online shopping became a popular method for purchasing apparel and accessories. Under Armour witnessed a significant increase in e-commerce sales, with online revenue rising by 25%. This contributed to an impressive 11% growth in their high-margin direct-to-consumer segment.

Although overall revenue decreased by approximately 3% to $1.40 billion during the final three months of 2020, it surpassed Refinitiv IBES’ estimated revenue of $1.27 billion. Furthermore, Under Armour achieved an unexpected profit of 12 cents per share, surpassing analysts’ predictions of a 7-cent loss. This is a significant improvement compared to the previous year when the company reported a loss of $15.3 million, or 3 cents per share.

Under Armour’s exceptional performance was especially evident in the Asia-Pacific market, where revenue skyrocketed by 26%. This growth helped offset the impact of store closures in the Europe, Middle East, and Africa region due to the resurgence of COVID-19 cases.

Looking ahead, Under Armour holds an optimistic outlook for its future prospects. The company anticipates high single-digit revenue growth in 2021, driven by both its domestic North American market and its international markets. However, this forecast fell slightly short of market estimates, which expected a growth rate of 12.65%.

In terms of adjusted profit per share, Under Armour’s outlook for 2021 is in line with market expectations, ranging between 12 and 14 cents. The company plans to leverage its strong performance and brand reputation to sustain its success in the coming year.

Overall, Under Armour’s resilience and ability to adapt to changing consumer behaviors during the pandemic have played a significant role in its surprising profitability. As more individuals prioritize fitness and seek comfortable and functional activewear, Under Armour is well-positioned to meet their needs and strengthen its position in the sportswear industry.

Links:

Under Armour’s official website
CNBC article on Under Armour’s Q4 2020 earnings