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Under Armour Q4 tops Street, but growth in North America still lags

BY Marianne Wilson

Under Armour reported better-than-expected fourth quarter earnings amid strong international growth and apparel sales.

The athletic apparel and accessories company reported net income of $4.2 million, or 1 cent per share, in the quarter ended Dec. 31, compared with a loss of $87.9 million, or 20 cents per share, a year earlier when it took a one-time charge related to changes in the U.S. tax laws. Adjusted earnings per share came to 9 cents per share, besting Street estimates of 4 cents.

Sales rose 1.5% to $1.39 billion, ahead of expectations for $1.38 billion. North America revenue fell 6% to $965 million, while international sales rose 28%, after adjusting for fluctuations in foreign exchange rates, to $395 million. Apparel sales rose 2%. Footwear sales fell 4% primarily, driven by lower sales to the off-price channel, and accessories sales declined 2%.

“Our 2018 results demonstrate significant progress against our multi-year transformation toward becoming an even stronger brand and more operationally excellent company,” said Under Armour chairman and CEO Kevin Plank. “As we look ahead to 2019, our accelerated innovation agenda, disciplined go-to-market process and powerful consumer-centric approach gives us increasingly greater confidence in our ability to deliver for Under Armour athletes, customers and shareholders.”

Under Armour’s outlook for 2019 remains unchanged. It is expecting sales to be “relatively flat” in North America, with total sales to increase 3% to 4%.

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