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Under Armour Sales Rise In Q2

The apparel and footwear maker’s revenue and earnings exceeded forecasts from analysts.

A renaissance may be underway at Under Armour.

The Baltimore-headquartered maker of athletic apparel, footwear and accessories has reported second-quarter gains that surpassed the predictions of analysts.

For the three-month period ended June 30, Under Armour’s total revenue soared 91% year-over-year to $1.35 billion. Analysts polled by Refinitiv were predicting $1.21 billion.

Under Armour

The surge is explained, in part, by the fact that this year’s Q2 compared to last year’s when pandemic restrictions were at their height, choking off business. Still, it was also a result of turnaround efforts that include selling more at Under Armour-owned stores, as well as customers paying full price for Under Armour merchandise.

Notably, Under Armour’s wholesale revenue increased 157% year-over-year to $768 million in Q2 2021. Under Armour products are sold in the promotional products industry.

For the second quarter, net income was $59 million, or $0.13 per share, compared to last year’s second quarter when Under Armour experienced a loss of nearly $183 million, or $0.40 per share. Adjusted net earnings, which exclude one-time charges, were $0.24 per share. Earnings also outpaced the predictions of analysts.

Under Armour’s operating income was $121 million, while the company increased gross margin 20 basis points to 49.5%.

“We are very pleased with Under Armour’s better-than-expected second-quarter results, which reflect solid progress compared to both 2020 and 2019,” said Under Armour President/CEO Patrik Frisk. “With the critical mass of our transformation behind us and the continued improvements across product, marketing, and our financial results, I believe this year sets a robust foundation that positions us well for our next chapter of profitable growth.”

Like companies across many industries, including promo, Under Armour is dealing with supply chain issues and keeping a close eye on how an increase in COVID-19 cases due to the delta variant might impact demand and potentially further hamper supply capabilities.

Still, buoyed by the strong second quarter, the company has increased its revenue rise forecast for 2021, saying annual sales are now likely to grow in the “low twenties percentage rate.” Previously, the prediction was for a high-teens percentage rate increase.

Under Armour’s growth comes after a rough few years for the company that included slowing sales and run-ins with regulators from the Securities and Exchange Commission. To help right the ship, Under Armour in April 2020 announced a restructuring plan designed to rebalance its cost base to improve profitability and cash flow. 

“At the halfway point of our fiscal year, I’m confident in our ability to execute our strategy by putting focused performers at the center of everything we do and increasing our capacity to drive consistent, profitable growth for our shareholders over the long-term,” said Frisk.