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.