Under Armour Posts $88M Loss in Fourth Quarter (But It's Not All Bad News)
In November, Under Armour announced that its sales slump got even worse. Now we have the athletic apparel company's fourth quarter results, and it was better than predicted.
According to The Baltimore Sun, Under Armour's stock price jumped more than 17 percent yesterday after the company reported stronger sales than it predicted to close out 2017. While there was weak demand in the U.S. for the company's athletic goods, the international and online markets kept sales strong.
For the final quarter, revenue grew 5 percent to $1.37 billion, which was higher than analysts predicted. So, even though the company lost $88 million, it was much less than original expectations. Under Armour's shares increased from $2.47 to $16.70 by day's end.
Under Armour CEO and founder Kevin Plank hopes that the company's shaky 2017 will pay off in the future. In a call with investors, Plank said Under Armour this year will be "a quiet company and a loud brand," according to The Baltimore Sun.
So what's the reason for the upswing? Apparel sales increased 2 percent to $952 million, thanks to growth in men's training and soccer. Footwear also rose by 9 percent. The brand also doubled down on its online sales strategy.
While Under Armour has continued to struggle in an athletic apparel market that has been trending toward more fashion-forward athleisure looks, the company said it's holding strong on its identity.
“The marketplace itself, from a trend perspective, has over the last two years moved in a little bit different direction than what the Under Armour brand stands for,” Under Armour President and chief operating officer Patrik Frisk told Yahoo Finance. “What might be perceived as a little bit of a weakness for us today, being in the ‘performance’ bucket so to speak, we believe long-term will be our greatest strength down the line. That doesn’t mean we’re not focused on style and making sure that we’re trend-right. But I think owning performance is going to be important for us moving forward.”
The company will be implementing smart footwear into its future product offerings, and Under Armour hopes this will be a catalyst for the future.
Until then, we'll see what happens.