Under Armour Starts Year On Positive Note With Q1 Profit Increase
Under Armour "got its year off to a better-than-expected start," exceeding sales expectations and reporting a $22.5M profit in Q1, according to Holden Wilen of the BALTIMORE BUSINESS JOURNAL. UA lost $30.2M during Q1 of '18. Sales grew 1.6% in Q1, to $1.2B from $1.19B last year. These results are a "positive start" to what UA "already expected to be the culmination of a three-year effort to get back on track after a slowdown in sales" in '17-18. UA's sales in North America, which account for 70% of the company's total, declined 2.8% to $843.2M. While that is down from a 1% drop in the prior-year quarter, it is "an improvement" from a 6% decline in Q4. International sales rose 12% to $328M, compared to a 27% increase last year and a 24% increase in Q4 (BIZJOURNALS.com, 5/1). In Baltimore, Lorraine Mirabella notes apparel sales inched up 1% to $775M, and running sneakers "helped boost" UA business by 8% to $293M in sales (BALTIMORESUN.com, 5/2). CNBC's Dominic Chu said UA has been on a "comeback of sorts," and has had "momentum to the upside for it lately" ("Squawk Box," CNBC, 5/2). At presstime, shares of UA were trading at $23.08, up 4.72% from the close of business yesterday (THE DAILY).
TAKING A CAUTIOUS TONE: BLOOMBERG NEWS' Sarah Halzack does not believe UA's decline in North America sales "should be dismissed," as the company will "only return to health when shoppers in its home market are responding more enthusiastically to its products, and when its wholesale relationships have recovered after last year’s troubles." Halzack: "Until we see a return to sales growth in North America, I struggle to have confidence that these changes have happened" (BLOOMBERG NEWS, 5/2). CNBC’s Sara Eisen said UA is making “really solid progress” in shrinking its inventory, which has “been a good story over the past few quarters.” But North America is a “key market” for the company, and apparel is its "biggest business." Eisen: "That business was actually flat” (“Squawk on the Street,” CNBC, 5/2).