BALTIMORE: Under Armour, exceeded Wall Street estimates for quarterly profit on Tuesday, as the sportswear maker cut product sourcing costs and sold fewer discounted sneakers during the holiday shopping season.
Inventory levels, which fell 12% during the quarter, and rising demand for the company’s popular Project Rock, Curry 6 and HOVR sneakers allowed Under Armour to cut back on discounts.
During the peak holiday period, the Baltimore-based company’s online markdowns were about 10% to 20% lower compared with a year earlier, William Blair analysts said before the results were announced.
Under Armour’s Class A common shares rose 2.7% in early trading following the results.
The company reported a net income of US$4.2 million in the fourth quarter ended Dec 31, compared with a loss of US$87.9 million a year earlier, when it took a one-time charge related to changes in the US tax law.
Excluding one-time items, Under Armour earned 9 cents per share, beating analysts’ average estimate of 4 cents, according to IBES data from Refinitiv.
Net revenue rose 1.5% to US$1.39 billion, edging past estimates of US$1.38 billion.