Under Armour Q1 2021 Earnings Report
Key Takeaways
Under Armour reported a strong start to 2021 with a 35% increase in revenue to $1.3 billion. The company's improved operating model and consumer connection investments drove the positive results. They are raising their full year outlook due to Q1 success.
Revenue increased by 35% to $1.3 billion, or 32% on a currency-neutral basis.
Wholesale revenue increased 35% to $800 million, and direct-to-consumer revenue increased 54% to $437 million.
Gross margin increased 370 basis points to 50.0%, driven by pricing, supply chain initiatives, and channel mix.
Diluted earnings per share was $0.17, and adjusted diluted earnings per share was $0.16.
Under Armour
Under Armour
Under Armour Revenue by Segment
Under Armour Revenue by Geographic Location
Forward Guidance
Under Armour updated its full-year 2021 outlook, expecting revenue to be up at a high-teen percentage rate, gross margin to be up approximately 50 basis points, and adjusted operating income to reach $230 million to $240 million.
Positive Outlook
- Revenue is now expected to be up at a high-teen percentage rate.
- North America is expected to have a high-teen percentage growth rate.
- The international business is expected to have a low thirties percentage growth rate.
- Gross margin is now expected to be up approximately 50 basis points.
- Adjusted operating income is expected to reach $230 million to $240 million.
Challenges Ahead
- Sale of MyFitnessPal, which carried a high gross margin rate, will largely offset benefits from pricing and supply chain efficiency.
- Continued uncertainty related to COVID-19 could have potential material impacts on its full-year business results in 2021.
- The United States and certain other foreign jurisdictions, are considered loss jurisdictions for fiscal year 2021.
- Income tax expense for the three months ended June 30, 2021, is subject to significant variability based on the actual quarterly pre-tax results.
- There is substantial uncertainty associated with accurately projecting the Company’s GAAP-based income tax expense and GAAP-based diluted earnings per share for the three months ended June 30, 2021.
Revenue & Expenses
Visualization of income flow from segment revenue to net income