Under Armour took into account the novel trends like running or biking outdoors and revised its forecast.
The sports goods company’s strategy includes the pandemic-driven trend to exercise outdoors resulted in a surge in demand for running shoes and face masks, Reuters said. On Friday, Under Armour Inc’s shares rose as much as 11.6%, after it also decided to sell its MyFitnessPal health tracking platform for $345 million to private equity firm Francisco Partners.
The pandemic decreased gym attendance significantly but people used to do exercise even under lockdown. Now, more people have opted to go running or biking outdoors, driving up sales of Under Armour’s HOVR line of training shoes and other fitness gear.
According to the third quarter’s results, the Baltimore-based company’s footwear revenue rose 19% to nearly $300 mln while accessories revenue rose 23% to $145 mln. Another surprising moment was selling of personal protective equipment. In Q3, sell of Under Armour athlete-focused “sports masks” rose drastically.
Amid coronacrisis, a lion share of Under Armour’s new demand was coming from its website and app. Pandemic just pushed the company’s e-commerce business up more than 50%.
Overall quarterly revenue was largely flat at $1.43 billion in the quarter, pressured by a drop in demand at North American department stores and a 6% fall in apparel revenue, but was above expectations of $1.16 billion.
In addition, the sale of MyFitnessPal, which it bought in 2015 for $475 mln, gives it more investment firepower and simplifies its larger digital fitness business.
It forecast full-year revenue to fall by a high-teen percentage, compared with estimates of a 25.7% drop. Despite the deepening crisis due to virus, Under Armour expects an annual adjusted loss of 47 cents to 49 cents per share, smaller than the 72 cents per share loss estimated by analysts.