Under Armour no longer expects to remain in loss in fiscal 2021

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on May 4, 2021
  • Under Armour no longer expects to remain in loss in fiscal 2021.
  • The sports equipment company beats Wall Street estimates in Q1.
  • Under Armour agreed to pay £6.49 million to settle an SEC charge.

Under Armour Inc. (NYSE: UAA) published its earnings report for the fiscal first quarter on Tuesday that topped Wall Street estimates, despite the ongoing COVID-19 restrictions. On the back of upbeat quarterly performance, the company also raised its guidance for the full year.

Financial performance in Q1

Under Armour reported £56.11 million of net income in the first quarter that translates to 12.26 pence per share. In the comparable quarter of last year, it had posted £425.31 million of loss, or 94 pence per share.

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On an adjusted basis, the sports equipment company earned 11.54 pence per share in Q1. Under Armour generated £910 million of revenue in the recent quarter versus the year-ago figure of £670.88 million.

According to FactSet, experts had forecast the company to record £820 million of revenue in the first quarter. Their estimate for adjusted per-share earnings was capped at a lower 2.88 pence. According to analyst Simeon Siegel of BMO Capital Markets:

“We believe margin growth is very real and sustainable.”

Guidance for the full financial year

For the full financial year, Under Armour now forecasts its revenue to climb by a little under 20%. It expects EPS to fall in the range of 1.44 pence to 2.88 pence this year. In its earlier guidance, it had anticipated up to 14.42 pence per share of loss.

The Baltimore-based firm expects adjusted EPS of up to 21.64 pence. Analysts, on the other hand, are calling for a 10.4% growth in revenue in fiscal 2021 and a 15.15 pence of adjusted earnings per share.  

Under Armour settles an SEC charge

The U.S SEC (Securities and Exchange Commission) recently blamed Under Armour for misleading investors. Earlier this week, the athletic apparel maker agreed to pay £6.49 million to settle the charge.

Impact on the share price

Under Armour shares were reported about 4% down in premarket trading on Tuesday. Including the price action, the stock is now exchanging hands at £16.80 per share. In comparison, it had started the year 2020 at a per-share price of a much lower £12.51. The price action should come in handy if you are interested in investing in the stock market.

Under Armour performed fairly downbeat in the stock market last year with an annual decline of about 20%. At the time of writing, the NYSE-listed firm is valued at £7.20 billion.

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