Under Armour Rallies in Q1

Before the global pandemic started, Under Armour was floundering, with sagging revenue and endorsement deals that failed to deliver big returns. 

The company’s Q1 2021 earnings show a major bounce back. Sales rose 35% year-over-year, bringing revenue to $1.26 billion. Online sales led the charge with 69% growth. 

An overall profit of $77.8 million will help begin to erase ugly memories from 2020.

The first quarter of 2020 saw the company lose $590 million, with sales down 23% due to COVID-related store closures. Pandemic-related layoffs and restructuring costs contributed $473 million to the losses in 2020. 

Under Armour renegotiated sponsorship contracts to pay out over a longer term and ended major deals.

• Under Armour declined to renew its on-field sponsorship deal with the NFL, estimated to be worth $10 million to $15 million per year.
• The company retained Tom Brady as a sponsored athlete and also has Steph Curry and Bryce Harper on its roster.
• A 15-year, $280 million licensing deal with UCLA was terminated, as was a 10-year, $50 million deal with the University of Cincinnati. UCLA sued Under Armour for prematurely ending what was the biggest licensing deal in college sports when signed in 2016. 
• Under Armour revealed it paid a $9 million fine to the SEC for misleading investors in 2015 and 2016 by recording $408 million in expected sales as current revenue.

Once seen as a legitimate threat to adidas and Nike, Under Armour still has a ways to go before equaling those rivals. Adidas recorded $6 billion in Q1 revenue, and Nike hit $10.4 billion for the fiscal quarter ending Feb. 28.