Athletic performance apparel company Under Armour (UA -0.15%) (UAA) gave investors some good news today when it released its third-quarter earnings report. President and CEO Patrik Frisk touted the company's "considerably better than expected performance" in a press release, even though overall revenue was flat compared to the previous-year period.
The company also announced a strategic sale of its MyFitnessPal health and fitness platform as part of its continued transformation that began when founder and former CEO Kevin Plank hired Frisk in July 2017.
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Strength in the business was driven by direct-to-consumer (DTC) revenue, which grew by 17%, mainly through e-commerce sales. The DTC channel represented more than one-third of total sales. The company's product mix experienced varied results. Sales of accessories increased 23%, but only made up about 10% of overall revenue. Footwear grew 19%, while apparel sales decreased 6% compared to the year-ago period.
Looking ahead, the company improved its outlook for the balance of the year. It had previously warned investors that fourth-quarter sales would be down 20% to 25% compared to 2019, but it now sees a drop only in the low teens.
Under Armour also announced that it will be selling its MyFitnessPal platform to private equity firm Francisco Partners for $345 million. The health-tracking app supports over 200 million users, Francisco Partners principal Christine Wang said in a statement. The transaction is expected to close in the fourth quarter of 2020. Under Armour acquired MyFitnessPal in February 2015 for $475 million.
