Under Armour Shares Spike 17%, International Growth More Than Off-Sets Declining North American Sales

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Despite declining revenue in North America (-4.5% to $1.02 billion), Under Armour (UAA) announced Q4 ’17 revenue increased 4.6% to $1.37 billion; buoyed by a 47% increase in overseas business (23% of total sales). On Tuesday’s earnings call, CEO Kevin Plank said the company anticipates ’18 sales will continue to grow in the low single-digits; while announcing an expanded restructuring plan ($110-$130 million pre-tax, on top of the $85 million booked last year), projected to save the company at least $75 million annually beginning in ’19. UAA lost $87.9 million in Q4 ’17, following a one-time expenditure related to the new tax laws and $36 million in restructuring charges (i.e. facility terminations, severance costs); on an adjusted basis, the company lost just $579,000.

Howie Long-Short: UAA’s 4th quarter wasn’t overwhelmingly successful, but it did beat analyst expectations ($1.37 billion vs. $1.31 billion) and that was enough for investors as shares climbed 17.36% on Tuesday; closing the day at $16.70. Moving forward, Plank sees “footwear (+9.5% in Q4 ’17), women’s and international (projecting +25% in ’18)” sales driving growth. Of course, he’ll have some competition with NKE looking to grow abroad too; projecting a $15.6 billion increase (to $50 billion) in revenue by 2020, with 75% of that growth expected to come from overseas markets.

Fan Marino: Sneaker brands release limited edition colorways to showcase their signature lines on All-Star weekend (2.16-2.18). Under Armour has unveiled the Steph Curry 4 “City of Angels” (on sale on 2.16, $130), the sneaker the Golden State star will wear as he leads his hand-picked squad against Team LeBron. James will wear the LeBron15 “All-Star”, a colorway inspired by the Hollywood Walk of Fame.

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Author: John Wall Street

At the intersection of sports & finance.

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