Global demand offsets US weakness for Under Armour
Company sharpens focus on international operations as North America business responsible for 73% of revenue cools
A pedestrian carries an Under Armour, shopping bag in Detroit, Michigan. Under Armour topped Wall Street forecasts for first-quarter revenue on Tuesday. Photographer: Rachel Woolf/Bloomberg
Sportswear maker Under Armour topped Wall Street forecasts for first-quarter revenue on Tuesday, as stronger demand outside the United States made up for stagnating sales in North America.
The company has sharpened its focus on its international operations, particularly in China, as the North America business that is responsible for some 73 per cent of overall revenue cools down after years of double-digit growth.
Under Armour is facing brutal competition from Nike and Germany’s Adidas and Puma in the United States, where the bankruptcies of US sporting goods retailers have also weighed on sales.
The company, which lists basketball star Steph Curry and tennis player Andy Murray among its biggest sporting sponsorship deals, said first-quarter sales in North America were unchanged year-over-year, while sales outside North America jumped 27 per cent.
North America sales had fallen in the previous two quarters, mirroring a decline in the broader athleisure market that has seen Under Armour’s share price sink 18 per cent in the past 12 months.
Nike chief executive Mark Parker promised a recovery in the US sportswear sector in March, saying his company was seeing “a significant reversal of trend in North America.”
But Under Armour’s loss widened to $30.2 million in the three months ended March 31st, from $2.3 million a year earlier, hurt by restructuring costs of $37.5 million.
Excluding one-time items, Under Armour broke even on a per-share basis, while analysts had expected a loss of 5 cents per share. Net revenue rose 5.9 per cent to $1.19 billion, topping analysts’ expectations of $1.12 billion. – Reuters