Under Armour, Inc.  (NYSE: UA, UAA) today announced unaudited financial results for the first quarter ended  March 31, 2021. The company reports its financial performance in accordance with accounting principles generally accepted in  the United States of America  (“GAAP”). This press release refers to “currency neutral” and “adjusted” amounts, which are non-GAAP financial measures described below under the “Non-GAAP Financial Information” paragraph. References to adjusted financial measures exclude the impact of the company’s 2020 restructuring plan and related impairment charges, impairments associated with certain long-lived assets and goodwill and related tax effects, and with respect to certain measures, the non-cash amortization of debt discount on the company’s convertible debt, and related tax effects. The reconciliation of non-GAAP amounts to the most directly comparable financial measure calculated according to GAAP is presented in supplemental financial information furnished with this release. All per share amounts are reported on a diluted basis.

“Under Armour is off to an excellent start for the year. Our first-quarter results demonstrate that our improved operating model and investments we’re making to amplify our connection with consumers are enabling us to deliver against strong demand for our brand,” said Under Armour President and CEO Patrik Frisk. “Additionally, with a solid balance sheet and well-managed inventory, we’re confident in our ability to drive well through 2021 as we get back on offense and make measured progress to returning to sustainable, profitable growth over the long-term.” Source Under Armour

First Quarter 2021 Review

• Revenue  was up 35 percent to  $1.3 billion  (up 32 percent currency neutral) compared to the prior year.
  • Wholesale revenue increased 35 percent to  $800 million  and direct-to-consumer revenue increased 54 percent to  $437 million, driven by 69 percent growth in eCommerce.
  • North America  revenue increased 32 percent to  $806 million  and international revenue increased 58 percent to  $452 million  (up 50 percent currency neutral). Within the international business, revenue increased 41 percent in EMEA (up 33 percent currency neutral), increased 120 percent in  Asia-Pacific  (up 107 percent currency neutral), and decreased 9 percent in  Latin America  (down 7 percent currency neutral).
  • Apparel revenue increased 35 percent to  $810 million. Footwear revenue increased 47 percent to  $309 million. Accessories revenue increased 73 percent to  $117 million.
• Gross margin  increased 370 basis points to 50.0 percent compared to the prior year, driven primarily by benefits from pricing, supply chain initiatives, and channel mix.
• Selling, general & administrative expenses  decreased 7 percent to  $515 million  primarily due to lower legal and marketing costs than the prior year.
• Restructuring and impairment charges  were  $7 million.
• Operating income  was  $107 million.  Adjusted operating income  was  $114 million.
• Net income  was  $78 million.  Adjusted net income  was  $75 million.
• Diluted earnings per share  was  $0.17.  Adjusted diluted  earnings per share  was  $0.16.
• Inventory  was down 9 percent to  $852 million.
• Cash and Cash Equivalents  was  $1.3 billion  at the end of the quarter, and no borrowings were outstanding under the company’s  $1.1
• billion  revolving credit facility.

CWEB Analyst’s have initiated a Buy Rating for Under Armour, Inc.  (NYSE: UA, UAA) and potential upside of $49 in 2021. We believe that total revenue will grow faster than expenses in 2021. Post covid-19 recovery will improve the bottom line. Gyms and other places are reopening which will benefit the company in long term.

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