Under Armour (NYSE:UA) shares jumped Friday, as the retailer’s earnings and sales topped estimates, with consumers stocking up on the brand’s sneakers and workout gear during the coronavirus pandemic.
CEO Patrik Frisk cited higher demand for the athletic apparel maker’s products, especially in North America, for the better-than-expected performance.
For the quarter ended Sept. 30, net income shrank to $38.9 million, or nine cents per share, from $102.3 million, or 23 cents a share, a year earlier. Excluding one-time charges, it earned 26 cents per share, topping expectations for three cents, according to estimates.
Revenue was about flat from a year earlier, at $1.43 billion, outpacing estimates for $1.16 billion.
In North America, revenue fell 5% to $963 million, while international sales increased 18% to $433 million.
Under Armour offered Wall Street a more upbeat outlook for 2020: It now expects full-year revenue to be down by a high-teen percentage rate. Previously, it had been calling for a drop of 20% to 25% in the second half of the year. Its new outlook, though still a decline, is better than the 25.7% drop that analysts had predicted.
The company has been working to get back to growth on its home turf. It has been heavily reliant in the past on department stores and discount chains to sell its gear, a strategy that has hurt profitability and diluted the brand’s image compared with competitors including Nike, Adidas and Lululemon.
But the pandemic effects — more consumers shopping online and looking for clothes and shoes to workout in — are giving Under Armour a welcomed boost.
UA shares began Friday up an amazing 85 cents, or 7.1%, to $12.89.
