Under Armour revenues top estimations, but shares drop as supply-chain problems impaired growth
Key takeaways:
- Under Armour, shares are declining despite the retailer declaring fiscal fourth-quarter profits and sales ahead of critics' estimates.
- Lingering supply chain restrictions cloud Under Armour's view and surpass its recent performance.
- CEO Patrik Frisk stated there is "continued delay in the marketplace."
Estimations surpassed Under of Armour's revenue:
Under Armour shares dropped on Friday despite the retailer declaring fourth-quarter profits and sales ahead of critics’ estimates, as supply chain restraints cloud its outlook.
The firm also cautioned that elevated freight costs would consider profits in the future months.
Under Armour has stated earlier that it’s been paying for more costly air cargo to move goods from overseas, but even shipping is more expensive right now.
Chief Financial Officer David Bergman called the forces a “momentary speed bump.” In the near term, Under Armour will stay alert and elegant till the shipping congestion and backlogs subside, he informed analysts on a post-earnings conference call.
Chief Executive Patrik Frisk stated that creating a healthier brand is working, even despite the headwinds. The firm’s goal is for customers to view Under Armour as a more premium label, alongside brands such as Nike and Lululemon, as it concentrates on essential wholesale partners like Dick’s Sporting Goods and Kohl’s.
The stock was just down 10% in trading Friday.
Here’s how the firm did in the three months finished Dec. 31 compared with what critics were expecting, based on Refinitiv estimates:
- Earnings per share: 14 cents adjusted vs. 7 cents predicted
- Revenue: $1.53 billion vs. $1.47 billion predicted
Under Armour declared a net revenue of $109.7 million, or 23 cents a share, compared with $184.5 million, or 40 cents a share, a year before.
It gained 14 cents a share, excluding one-time items, topping critics’ estimates for 7 cents.
Earnings increased to $1.53 billion from $1.4 billion a year before. That beaten critics’ anticipations for $1.47 billion.