Under Armour Shares Jump 27.7% After Profitable 3rd Quarter
Under Armour’s 3rd quarter results were released on Tuesday and there was a 27.7% jump in its share price from $18.19 to $23.23. This was the largest single-day gain since 2008, according to Bloomberg. Under Armour’s earnings and revenue surpassed industry estimates.
Under Armour’s revenue in the quarter was up 2% to $1.42 billion. Wholesale revenue increased 4% to $914 million and direct-to-consumer revenue was flat at $465 million. North American Revenue decreased 2% to $1.1 billion and the international business increased 15% to $351 million.
Net income for the quarter was $75.3 million. Under Armour lost $96 million in the 2nd quarter and $30 million in the 1st quarter. The company expects to incur approximately $200 to $220 million in pre-tax restructuring and related charges in connection with its previously announced 2018 restructuring plan. Under Amour’s operating loss for 2018 is expected to be $50 to $55 million.
“Our third quarter results demonstrate that our multi-year transformation is on track,” said Under Armour Chairman and CEO Kevin Plank in a press release. “As we work through this chapter, we are staying sharply focused on our brand by connecting even more deeply with our consumers while delivering industry-leading, innovative products and premium experiences. Coupled with increasingly greater business discipline and resulting efficiencies, we continue to gain confidence in our long-term path and ability to deliver for our consumers, customers and shareholders.”
Under Armour’s stock was at an all-time high in 2015 at $54.70.
As Under Armour has worked to become more operationally efficient in the last couple years it has reduced its workforce. The company laid off 280 employees last year, and announced last month that another 400 employees will be laid off by March 2019. Under Armour will have more than 13,000 employees in its global workforce following the layoffs.
Under Armour has not yet identified how many of its approximately 3,700 Greater Baltimore employees (according the the Baltimore Business Journal) will be laid off. An Under Armour spokesperson told SouthBMore.com the following in an email: “We’re not providing that specific level of detail. Baltimore has been the bedrock of our winning brand and we are deeply committed to the city we call home. This community is a key to the innovation that will allow us to reimagine the future. Through this transition, we will be approaching every teammate with the utmost care and respect, but these are necessary steps to become a more operationally excellent company.”
Last August when Under Armour laid off 280 employees, half of them were based in Greater Baltimore.
Under Armour will incur $10 million in cash severance charges with this reduction in its workforce.
Under Armour announced in October that it had agreed to an endorsement deal with Philadelphia 76ers star center Joel Embiid.
Under Armour is currently headquartered at Tide Point in Locust Point and has a distribution facility in Curtis Bay. It is planning a new 50-acre headquarters at Port Covington where it already has one office building. It is also under construction on a 1.3-million sq. ft. distribution facility at Sparrows Point which is expected to open next year.
Under Armour previously announced it would begin construction on Phase 1 of its new campus at Port Covington last year, but that did not move forward. No timetable has been given for when construction will be begin.
Photo courtesy of Under Armour
About the Author: Kevin Lynch
Founder and Publisher of SouthBmore.com, longtime resident of South Baltimore, and a graduate of Towson University. Diehard Ravens and O's fan, father of three, amateur pizza chef, skateboarder, and "bar food" foodie. Email me at Kevin@InceptMM.com and follow me on Twitter at @SoBoKevin.
