Under Armour earnings top estimates, but shares fall as supply chain issues hurt growth

Under Armour earnings top estimates, but shares fall as supply chain issues hurt growth

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Under Armour shoes are seen inside of a store on November 03, 2021 in Houston, Texas.
Brandon Bell | Getty Images

Under Armour shares fell on Friday despite the retailer reporting fiscal fourth-quarter earnings and sales ahead of analysts’ estimates, as a cloudy outlook hampered by lingering supply chain constraints overshadowed those results.

The stock was recently down less than 2% in premarket trading.

“As we navigate ongoing uncertainty in the marketplace, we remain focused on delivering industry-leading innovations,” said CEO Patrik Frisk, in a press release.

Here’s how the company did in the three-month period ended Dec. 31 compared with what analysts were anticipating, based on Refinitiv estimates:

Earnings per share: 14 cents adjusted vs. 7 cents expected Revenue: $1.53 billion vs. $1.47 billion expected

Under Armour reported net income of $109.7 million, or 23 cents a share, compared with $184.5 million, or 40 cents a share, a year earlier. Excluding one-time items, it earned 14 cents a share, beating analysts’ estimates for 7 cents.

Revenue grew to $1.53 billion from $1.4 billion a year earlier. That topped analysts’ expectations for $1.47 billion.

Net revenue in North America rose 15%, while international sales were up 3%.

Within total revenue, apparel was up 18%, footwear grew 17%, however accessories tumbled 27%.

Last year, Under Armour announced it was changing its fiscal year end date from Dec. 31 to March 31. Following a three-month transition period from Jan. 1, 2022 to March 31, Under Armour’s next fiscal year will run from April 1 to March 31, 2023.

The retailer on Friday gave an outlook for the transition quarter. Sales are expected to be up a mid-single-digit rate, compared with a prior outlook of a low-single-digit increase. It said, however, this forecast includes about 10 percentage points of headwinds tied to reductions in its spring and summer order book from ongoing supply chain constraints.

Under Armour also narrowed the top end of a range for its ongoing restructuring plan. It now expects to recognize $525 million to $550 million in charges related to this plan, compared with a prior range of $525 million to $575 million. Under Armour said it has booked $514 million of pretax charges to date.

Read the full earnings press release from Under Armour here.

This story is developing. Please check back for updates.

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