Under Armour reins in discounts, beats holiday-quarter profit forecasts

[February 12, 2019]  (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.

A wall of basketball shoes is seen on display at an Under Armour store in Chicago, Illinois, U.S., October 25, 2016. REUTERS/Jim Young/File Photo

Inventory levels, which fell 12 percent during the quarter, and rising demand for the company'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 company'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 Armour'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 analysts' 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)

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