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Under Armour shares rise as retailer hikes full-year outlook, sees demand returning

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Under Armour shares rise as retailer hikes full-year outlook, sees demand returning


Shoppers pass an Under Armour store in White Plains, New York.

Scott Mlyn | CNBC

Under Armour on Tuesday raised its sales and profit outlook for the full year, as the sports apparel maker sees demand for its brand roaring back with shoppers returning to its stores.

It reported first-quarter sales growth of 35%, topping analyst expectations. The company is lapping a period a year earlier when its stores were temporarily shut, and Under Armour had to turn to layoffs and other cost-cutting measures to fight through the health crisis.

Its stock jumped more than 3% in premarket trading.

Here’s how the company did during its quarter ended March 31 compared with what analysts were anticipating, based on a Refinitiv survey:

  • Earnings per share: 16 cents adjusted vs. 3 cents expected
  • Revenue: $1.26 billion vs. $1.13 billion expected

Under Armour’s net income grew to $77.8 million, or 17 cents per share, compared with a loss of $589.7 million, or $1.30 per share, a year earlier.

Excluding one-time charges, the company earned 16 cents per share, better than the 3 cents that analysts were anticipating, based on Refinitiv estimates.

Sales rose to $1.26 billion from $930.2 million a year earlier, beating estimates for $1.13 billion.

In North America, sales were up 32%, while they grew 58% in Under Armour’s smaller international division, boosted by recoveries in markets that include China.

Online sales rose 69% across the business.

CEO Patrik Frisk said the company is seeing strong demand for the brand, as business rebounds across Asia and North America. In the year-ago period, Under Armour’s sales tumbled more than 20%, as its business took a blow from the coronavirus pandemic and its stores were forced shut, freezing its turnaround efforts. 

The company has also worked on managing its inventories and reducing its reliance on discounting to get rid of dated merchandise. Frisk said those efforts are paying off and helping to boost profits.

Under Armour said it now expects full-year revenue to rise by a high-teen percentage rate, compared with a previous outlook of a high-single-digit increase. Analysts had been looking for 10.1% growth, according to a Refinitiv survey.

It’s calling for 2021 adjusted earnings per share to be in the range of 28 cents to 30 cents, compared with a prior range of 12 cents to 14 cents. Analysts had been calling for earnings per share of 20 cents.

Under Armour said it expects to realize roughly $35 million to $40 million in charges during its second quarter related to its ongoing restructuring.

On Monday, Under Armour said it agreed to pay the Securities and Exchange Commission $9 million to settle charges that it mislead investors from 2015 to 2016 by recording $408 million in sales that it expected to complete in future quarters.

The retailer settled the charges without admitting or denying the findings in the SEC’s order. Under Armour had also been responding to requests for documents and information from the U.S. Department of Justice, and said Monday that it hasn’t received any requests from the DOJ since the second quarter of 2020.

As of Monday’s market close, Under Armour shares are up more about 40% year to date. The company has a market cap of $10 billion.

Find the full earnings press release from Under Armour here.

WATCH LIVE: Under Armour CEO Patrik Frisk will join CNBC’s Closing Bell for an exclusive TV interview on Tuesday at 3 p.m.



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Closer EU military cooperation with U.S., Canada, Norway is quantum leap, Germany says By Reuters

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Closer EU military cooperation with U.S., Canada, Norway is quantum leap, Germany says By Reuters



© Reuters. FILE PHOTO: German Defence Minister Annegret Kramp-Karrenbauer arrives for the weekly cabinet meeting at the chancellery in Berlin, Germany May 5, 2021. John MacDougall/Pool via REUTERS

BERLIN (Reuters) – Military cooperation in the European Union will get a boost as the 27 nation bloc is admitting for the first time outside partners such as the U.S., Canada and Norway to join in one of its projects, Germany said on Thursday.

“It will be a quantum leap in terms of concrete cooperation,” German Defence Minister Annegret Kramp-Karrenbauer said ahead of the first in-person meeting with her EU counterparts in over a year in Brussels.

The EU project on military mobility that will see the U.S., Canada and Norway join is designed to facilitate the movement of troops across Europe, something NATO deems as crucial in the event of a conflict with Russia.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Blinken says on Chinese investment in West: we have to be ‘very careful’ By Reuters

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Blinken says on Chinese investment in West: we have to be ‘very careful’ By Reuters



© Reuters. FILE PHOTO: U.S. Secretary of State Antony Blinken arrives at the G7 foreign ministers meeting in London, Britain May 5, 2021. Ben Stansall/Pool via REUTERS

LONDON (Reuters) – U.S. Secretary of State Antony Blinken said the West had to be very careful about the exact nature of Chinese investment in Western economies.

“I think we have to be very careful about exactly what the nature is of that investment,” Blinken told the BBC in an interview when asked about Chinese investment in the West.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Analysis-Global rates volatility forces investor rethink on Asian bonds By Reuters

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Analysis-Global rates volatility forces investor rethink on Asian bonds By Reuters



© Reuters. FILE PHOTO: People walk with umbrellas in Lujiazui financial district in Pudong, following the coronavirus disease (COVID-19) outbreak in Shanghai, China September 17, 2020. REUTERS/Aly Song

By Stanley White and Andrew Galbraith

TOKYO/SHANGHAI (Reuters) – A pause in a broad selloff in U.S. treasuries and other global bonds last month has given foreign investors time to rethink their Asian holdings and shift money to safer markets such as China, away from riskier countries like Indonesia and India.

China, India and Indonesia were among the largest recipients of yield-seeking foreign investment last year.

But a divergence in economic recoveries from the coronavirus pandemic, a dollar rally and questions about the Federal Reserve’s resolve to keep U.S. rates low have forced fund managers to see some markets as safer than others.

Moreover, a surge in U.S. yields in the first quarter of 2021, the sharpest since late 2016, has blunted the appeal of some lower-yielding Asian bond markets.

“Within Asia, you have countries like Thailand, Singapore, and Malaysia that are now less attractive vis-a-vis the United States,” said Leonard Kwan, an emerging markets fixed income portfolio manager at T. Rowe Price in Hong Kong. “It would likely be those markets that we look to rotate out of, and into Treasuries.”

In March, foreign investors turned net sellers of Chinese sovereign bonds for the first time in more than two years. But asset managers remain bullish because of China’s high real yields and its close links to a rebound in global trade.

China’s bond market saw a rare 8.95 billion yuan ($1.38 billion) drop in holdings by overseas investors in March as they trimmed positions in Chinese government bonds, official data showed.

Kwan says he has continued to plough money into Chinese bonds, citing China’s domestically driven market with low correlations to global investment and rates cycles.

Davis Hall, head of capital markets in Asia at Indosuez Wealth Management in Hong Kong, reckons buying Chinese debt is a “no brainer” for Japanese, Swiss, or European investors with attractive yields compensating for currency risks.

real yields, which adjust for changes in consumer prices, are above 3%. In comparison, Japan’s and Switzerland’s real yields are less than 1% while German bunds and U.S. Treasuries carry negative real yields.

China’s efforts to rein in credit growth are a concern, but asset managers expect the central bank will avoid raising rates and resort to other tools that pose fewer risks to bond prices.

Last year’s investor darlings, Indonesia and India, are however no longer so, as asset managers worry about quantitative easing and currency weakness, suggesting a bigger shift in allocations around the region.

Foreign investors sold a net $1.1 billion in Indonesian bonds in February and $1.4 billion in March, marking the biggest outflows in a year. They sold a net $1.8 billion of Indian bonds in February and March, the biggest outflows in almost a year.

While a yield of 6.5% on its 10-year bond makes Indonesia an attractive bet, the prospects of a patchy and slow economic recovery, high fiscal deficit and a shaky currency that has already shed 2.8% against the dollar this year worry investors.

India is not as popular with bond investors as China or Indonesia, and risks to its economic outlook are more acute after a fierce surge in coronavirus infections.

Hayden Briscoe, head of fixed income global emerging markets and Asia Pacific at UBS Asset Management in Hong Kong, says investors are likely to keep away from emerging market bonds as these central banks contemplate raising pandemic-era low interest rates.

“At the moment you’ve got a few things going wrong,” Briscoe said. “You’ve got the rates going wrong for your rate volatility in the U.S. and then you’ve got the dollar on the stronger side now. It’s time to be sort of wary on your emerging market allocations.”

While U.S. volatility began to subside at the end of April, it remains relatively elevated and investors could be more “idiosyncratic” in their allocations and assessment of whether bonds pay enough to compensate for risks.

“There’s always the tension of, is there enough carry to compensate for the volatility?” said Briscoe.





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