Omnichannel

Under Armour revenue down but robust e-commerce is a bright spot

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February 12, 2021

Athletic wear retailer Under Armour saw revenue dip 3%, to $1.4 billion in its fourth quarter and fiscal year ended Dec. 31, 2020, but direct-to-consumer revenue increased 11% thanks to a 25% bump in e-commerce growth.

"Improving brand strength and consistent operational execution delivered better than expected results in the fourth quarter. Our global team was exceptionally resilient and disciplined amid a highly challenging year which included the COVID-19 pandemic, and for Under Armour, a comprehensive restructuring effort including further operating model refinements," Patrik Frisk, president and CEO of Under Armour, said in a press release on the latest financials report.

"As we continue to navigate uncertainty around the pandemic, we remain focused on execution and the efforts necessary to stabilize our business further and improve our ability to deliver sustainable shareholder value over the long-term," he said.

Additional insights include:

North America revenue decreased 6% to $924 million and international revenue increased 7% to $448 million (up 4% currency neutral).
Apparel revenue decreased 4% to $931 million. Footwear revenue declined 7% to $241 million. Accessories revenue increased 32% to $145 million.
Operating income was $56 million. Adjusted operating income was $120 million.
Other income (expense), net was $179 million, driven by a $182 million gain due to selling the company's MyFitnessPal platform.
Net income was $184 million. Adjusted net income was $55 million.
Diluted earnings per share was $0.40. Adjusted diluted earnings per share was $0.12.
Inventory was relatively flat at $896 million.

In regards to the retailer's full-year 2021 outlook:

Revenue is expected 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.

Operating income is expected to reach $5 million to $25 million. Diluted loss per share is expected to be about $0.18 to $0.20 and adjusted diluted earnings per share is expected to be in the range of $0.12 to $0.14.

In terms of state of operations as of Jan. 31, 2021:

The majority of the company's supply chain and distribution network was operational.

The majority of global locations (direct-to-consumer and mono-branded partner stores) where Under Armour is sold were open; however, not all are operating at full capacity due to various restrictions. By region:

Approximately 95% of North American stores were open.
Approximately 70% of EMEA stores were open.
Approximately 95% of Asia-Pacific stores were open.
Approximately 70% of Latin American stores were open.
Globally, while traffic trends within the company's owned retail locations remain challenged, conversion trends remain strong. Additionally, the company experienced significant e-commerce growth around the world during the fourth quarter and full-year 2020.