Under Armour Stocks Surge 20% After Sales Report

Under Armour announced on Thursday that it is experiencing a decline in sales across its business, yet the athletic apparel retailer's fiscal first-quarter results exceeded Wall Street's expectations, leading to a surge in its stock during early trading. The company reported an adjusted earnings per share of 1 cent, surpassing the anticipated loss of 8 cents. However, Under Armour also recorded a significant loss of $305.4 million, or 70 cents per share, compared to a profit of $10 million, or 2 cents per share, from the same period last year. Sales for the quarter fell to $1.18 billion, a decrease of approximately 10% from $1.32 billion a year earlier. In response to ongoing challenges, Under Armour previously announced plans to lay off an unspecified number of employees, reduce promotions, and streamline its product offerings. Despite the overall sales decline, CEO Kevin Plank expressed optimism about the company's early progress in these initiatives. In North America, Under Armour's largest market, sales dropped 14% to $709 million, although this figure was better than the $669.1 million analysts had predicted. The company also reported declines in wholesale revenue, which fell 8% to $681 million, and direct-to-consumer sales, which decreased by 12% to $480 million. To regain growth and establish itself as a premium brand in the competitive athletic apparel market, Under Armour is focusing on sustainability and innovation. Recently, the company acquired the sustainable fashion brand Unless Collective and appointed its founder, Eric Liedtke, as executive vice president of brand strategy. Analysts from William Blair noted that while the first-quarter results were better than expected, it will take time for Under Armour to return to a growth trajectory.