US-based clothing retailer Under Armour has reported a 35% growth in revenue to $1.3bn in the first quarter of the year.
The company’s wholesale revenue increased by 35% to $800m and its direct-to-consumer (DTC) revenue rose by 54% to $437m, led by a 69% growth in e-Commerce.
DTC growth was also driven by a 44% growth in the brand’s owned and operated retail stores.
Under Armour’s sales increased more than they were expected to, due to high demand in its wholesale and DTC businesses.
The company’s operating income in the quarter was $107m and its adjusted operating income was $114m, excluding restructuring and impairment charges of $7m.
Its net income was $78m, or $0.17 of diluted earnings per share (EPS) after tax.
The gross margin was slightly better than expected, with a 370 basis points increase to 50%. This was supported mainly by pricing improvements, supply chain initiatives benefits and favourable channel mix.
Under Armour’s North America revenue increased by 32% in the first quarter to $806m, and its international revenue increased 58% to $452m.
In the company’s international business, Europe, Middle East and Africa (EMEA) revenue was up by 41%, Asia Pacific revenue increased by 120% and Latin America revenue was down by 9%.
The company’s Apparel segment saw its revenue increase by 35% to $810m. Its Footwear revenue increased by 47% to $309m, while its Accessories revenue increased by 73% to $117m.
Under Armour president and CEO Patrik Frisk said: “Under Armour is off to an excellent start for the year.
“Our first-quarter results demonstrate that our improved operating model and the investments we’re making to amplify our connection with consumers are enabling us to deliver against strong demand for our brand.
“In addition, with a solid balance sheet and well-managed inventory, we’re confident in our ability to drive well through this year as we get back on the offensive and make measured progress to returning to sustainable, profitable growth over the long-term.”
Under Armour said that potential material impacts could be felt on its full-year business results this year due to uncertainty surrounding the current Covid-19 situation. Despite this, it has raised its full-year outlook.
The company forecast its revenue to be up at a high-teen percentage rate for the whole year, its operating income to reach around $105m to $115m, and its adjusted diluted EPS to be in the range of $0.28 to $0.30.
In February, the company shared plans to close around 2,000 to 3,000 wholesale partner stores later in the year as part of its restructuring and turnaround strategy.