Under Armour reins in discounts, beats holiday-quarter profit forecasts
(Reuters) - Under Armour Inc, 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 percent during the quarter, and rising demand for the companyâ€™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 companyâ€™s online markdowns were about 10 to 20 percent lower compared with a year earlier, William Blair analysts said before the results were announced.
Under Armourâ€™s Class A common shares rose 2.7 percent in early trading following the results.
The company reported a net income of $4.2 million in the fourth quarter ended Dec. 31, compared with a loss of $87.9 million a year earlier, when it took a one-time charge related to changes in the U.S. tax law.
Excluding one-time items, Under Armour earned 9 cents per share, beating analystsâ€™ average estimate of 4 cents, according to IBES data from Refinitiv.
Net revenue rose 1.5 percent to $1.39 billion, edging past estimates of $1.38 billion.
Reporting by Uday Sampath in Bengaluru; Editing by Arun Koyyur and Sai Sachin Ravikumar