Shares of Under Armour Inc. (NYSE:UAA) were up 2.25% at the bottom of the noon hour on February 15. The stock has surged 24.8% in 2018 thus far after a very difficult 2017. The company released its 2017 fourth quarter and full-year results on February 13.
In the fourth quarter revenue rose 4% to $1.4 billion as Under Armour was powered by strong international results. Revenue in Europe, the Middle East, and Africa was up 45% and 56% in Asia-Pacific. Apparel revenue rose 2% to $952 million with footwear revenue increasing 9% in the quarter. Under Armour reported a net loss of $88 million in Q4, with the bulk of the loss coming from a one-time charge from U.S. tax reform. On an adjusted basis it posted a net loss of $1 million.
For the full-year revenue rose 3% to $5 billion and total net loss was $48 million, while adjusted net income was $87 million when excluding the one-time tax reform charge and restructuring costs. For its 2018 outlook Under Armour is projecting a low single-digit increase in revenue and capital expenditures will be between $225 million and $275 million.
Under Armour will struggle to find openings as its top competitor Nike Inc. continues to dominate overseas markets. Dick’s Sporting Goods, which is a top wholesaler for Under Armour, has ambitions to dramatically increase its own private offerings which could eat into Under Armour sales. In spite of this solid quarter, it is difficult to recommend Under Armour at this stage.
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