Ladies and gentlemen, thank you for standing by, and welcome to the Under Armour, Inc. Fourth Quarter Earnings Webcast and Conference Call. [Operator Instructions]. I would now like to hand the conference to your speaker today, Lance Allega, SVP, Investor Relations and Corporate Development. Please go ahead, sir.

Thank you. Good morning to everyone joining us for Under Armour's fourth quarter and year-end 2020 earnings conference call. The information made available today includes forward-looking statements that reflect Under Armour's view of its current business as of February 10, 2021, and considerations for future events that may impact our business moving forward. Statements made today are subject to risks and uncertainties that are detailed into documents regularly filed with the SEC and the safe harbor statement included in this morning's press release, both of which can be found on our website at about.underarmour.com. It's important to note that due to ongoing uncertainty related to COVID-19 with respect to the duration and extent of the virus' immediate and long-term impact on the global retail environment, we continue to expect the possibility of material impacts on our business results. Accordingly, future results could differ meaningfully from historical practices and results or current descriptions, estimates and suggestions. On today's call, we may reference non-GAAP financial information, including adjusted and currency-neutral terms, which are defined under SEC rules in this morning's press release. You may also hear us refer to amounts under U.S. GAAP. Reconciliations of GAAP to non-GAAP measures can also be found in our press release, which identify and quantify all excluded items and provides our view about why we believe this information is useful to investors. Joining us on today's call will be Under Armour President and CEO, Patrik Frisk; and CFO, Dave Bergman. Following our prepared remarks, we'll open the call for questions. And with that, I'll turn it over to Patrik.

Thank you, Lance, and good morning, everyone, and welcome to our fourth quarter and year-end 2020 conference call. Before we start, I'd be remiss not to point out what a fantastic past weekend this was for sport and for Under Armour. From Stephen Curry scoring 57 points, the eighth time he scored more than 50 in a game, to Chase Yarn winning the NFL Defensive Rookie of the year and Joel Embiid putting up 33 to keep the 76ers in first place to Jordan Spieth posting a career-best 10 birdies in a round, there was no shortage of UA highlights this weekend. Oh, and of course, there's one more highlight or better yet, make that the seventh as a #7 for the gold quarterback, Tom Brady, as he had led the Tampa Bay Buccaneers for their second-ever Super Bowl victory. With Tom, it's quite easy to run out of ways to describe yet again another incredible accomplishment he's added to his unparalleled career. In his 10 years as an Under Armour athlete, Tom has exemplified what perseverance, hard work and leadership can do in pursuit of excellence. On behalf of the entire Under Armour family, Tom, thank you for making us better. Now turning back to our results. As I reflect on my first year as CEO amid a global pandemic that has tested all of us, I'd start by underscoring just how incredibly proud I am of our team's resilience and their ability to execute at an incredibly high level against our long-term strategy. We've made significant progress on our way to becoming a stronger brand and a better run company during the past year from managing through a 3-month global retail shutdown and relaunching our North American e-commerce platform to executing a comprehensive restructuring effort and divesting the…

Thanks, Patrik. In the fourth quarter and for the full year, we delivered stronger-than-expected results, a performance to be proud of, especially during a global business environment that faced significant macro and micro challenges. Over the past few years, the work we've accomplished created the space and optionality necessary to work through these challenging conditions. From industry-leading product innovations to connecting consumers through fantastic brand stories and improved shopping experiences to deliver decisions to ensure liquidity, along with executing the divestiture of MyFitnessPal, I'm pleased with the way we closed out 2020. With that said, let's dive into our fourth quarter results starting with revenue, which was down 3% to $1.4 billion compared to the prior year. This was better than we had expected due to higher-than-anticipated demand across our wholesale and DTC businesses. From a channel perspective, our wholesale revenue was down 12%. Keep in mind, about $130 million in orders shifted out of the fourth quarter into the first quarter of 2021 due to timing impacts from COVID-19 related to customer order flow and changes in supply chain timing that we discussed on our last call. Relative to our plan, we experienced stronger sell-through and higher demand from our customers. Our direct-to-consumer business increased 11% driven by 25% growth in our e-commerce business. Relative to our plan, we experienced better-than-expected traffic trends in our retail business. Our licensing business was down 12% driven primarily by lapping onetime settlements in the prior year with 2 of our North American partners and lower minimum royalty payments. This result was better than expected driven primarily by our Japanese partner. By product type, apparel revenue was down 4% driven by declines in our train and team sports categories. Footwear was down 7% mainly driven by declines in our team sports category. And…

[Operator Instructions]. Our first question comes from Jim Duffy with Stifel.

Great progress with the business. Dave, I want to dig in some on the SG&A. SG&A pencils to low single-digit growth, which implies leverage on the revenue growth. For 2020, you talked about $40 million to $60 million in savings from the restructuring with more to come in '21. How much more savings from the restructuring will build on this in 2021? And then can you talk about how SG&A splits for the year? Where do you see marketing expense for the year? Are you expecting deleverage there? And where do you see operating overhead?

Yes, Jim, we've obviously been putting a lot of work into this area over the years. And our cost structure is built for a larger business, and it will take driving greater revenue to return to that kind of double-digit operating margins. But as we drive higher revenue in areas like marketing, IT and retail, we should be able to leverage the cost of these areas more efficiently and win -- kind of win going forward from a productivity perspective. As we mentioned, there are some key areas we've got to keep investing in like DTC, international and marketing. But the discipline and processes that we now have in place are going to help us kind of better manage our SG&A growth relative to revenue and making sure that we're continuing to leverage going forward. I would say that based on the timing of execution of our restructuring activities 2020 and into early '21, we talked about a benefit of about $40 million to $60 million on operating income in 2020. You can assume that, that benefit is going to at least double when you think about what's in the 2021 numbers. But again, we are reinvesting some of that, especially in the marketing front. And so this year, we're not giving an exact percentage of marketing, but we are going to stay at a pretty healthy investment area as a percentage of our revenue. I would say it might not be as high as in 2020, but it's probably going to be a higher percentage than it was potentially in '19 or prior as we continue to want to invest and really grow the brand and keep that momentum going. So that's what we're seeing, and we look forward to seeing that continued leverage as we drive into '22 as well.

And Dave, you've talked -- you've done a lot of hard work on eliminating fixed costs. You've talked about the capacity to flex. Can you give a few examples of changes in the cost structure that give you that enhanced flexibility?

Yes. I mean, a couple of things I would say is that from a people cost perspective, we are definitely rebased now, and that gives us a lot more flexibility going forward. In addition, from a marketing perspective, we've really gone deep there relative to trying to alleviate and get out of some of the longer-term contracts that we weren't receiving much of the benefit there. And that allows us to have kind of a bigger war chest to be nimble on a marketing front going forward and making sure we're deploying that marketing in the areas of highest return based on the roaming work that we've been doing. Some other areas that have really benefited, like even depreciation is now becoming more of a tailwind for us, whereas it used to be a headwind based on the high CapEx levels back in '16, '17, '18. But our investment committee has worked diligently to really prioritize our CapEx spending, and now we're seeing depreciation slowing down considerably, which has been nice as well. So there's a lot of other areas that we've been addressing around T&E and other areas of spend, but we are instilling the right discipline now, benchmarking metrics to make sure that we're investing in the right places going forward and keeping it under control and leveraging as we go into '22.

Our next question comes from Paul Trussell with Deutsche Bank.

Congrats on the strong execution. First, maybe can you provide an updated view of how Under Armour is positioned in the North American wholesale market? Specifically, can you provide more color on the -- or quantify even the impact of the supply limitations and reduced store count to revenues, where you are from an off-price channel inventory position? And then conversely, maybe also speak to the positive on what you're seeing in terms of brand momentum in full price sell-through.

Paul, this is Patrik. As it relates to the efforts that we're doing overall to what we call constrained demand and as part of that, the pullback that we're doing in some undifferentiated doors in North America, that really gets underway in 2021 and predominantly in the back half of the year as we've been wanting to be fair to the customers and allow them to adjust to our actions. So that will be a 2- to 3-year journey for us, where we get out of 2,000 to 3,000 doors, and that's starting in the back half of this year. And what we'll be left with when we're through that journey is really what we believe are more appropriate doors for us with doors that we feel are going to wins in other ways -- win with the winners kind of mentality there. And where we also feel that we can earn shelf space back. So that's really important for us. It's also an important for our segmentation and our merchandising strategy going forward. So those things will all help to make sure that we're building toward a more premium position. And in combination with that, I spoke about it in my script in terms of the effort that we're putting into our own direct-to-consumer as well and becoming a better e-commerce and full price brick-and-mortar as well as an enhanced positioning in our outlet going forward here in North America. All of that together is going to elevate the brand. And we're already seeing some of that happen to some respect in terms of what we talked about as it relates to more full-price selling. But it's a journey. And it happens over time, step by step. And we initiated this already last year, and we'll continue to do so as we go into the future.

And Paul, this is Dave. I would also add, you mentioned kind of on the third-party off-price channel. That's one where we've definitely been working it down steadily over the past couple of years, which we're proud of, and we've kind of landed on that. For 2020, we landed at about a 4% mix of our total business there. And we've got a lot tighter discipline now on how we manage and order our inventory. So for 2021, we believe we can probably improve that maybe a little bit more from a mix perspective. But it should no longer be a revenue headwind for us. So we're excited about where we are there, too.

And then the follow-up, just gross margins were impressive in 4Q. Maybe just talk through the drivers of the improvement on this past period and just the puts and takes that we should keep in mind that leads to your kind of slight expansion this year?

Yes. I mean, in Q4, a big part of it was channel mix because we had lower mix of business within our distributor markets and also lower percentage of third-party off-price sales. But then also, we had a much higher DTC mix versus Q4 of 2019. So that area was a big area for us with the channel mix in Q4. But then also, we continue to see some really solid supply chain benefits from a costing perspective. And we've talked about that a lot over the last year or so about all the work we've done with consolidating our vendor base, SKU rationalization, and we're seeing that really come through continually here. So excellent, excellent work from the supply chain side on that front. And then we also saw a little bit of benefit in Q4 relative to the region mix with the APAC growth being very strong and APAC being kind of our highest gross margin region. So all those things were really helpful for us in Q4. It was obviously a lot better than we had given outlook for on our last call. And a lot of that was due to less promotions and discount than we expected due to the stronger sell-through -- sell-in and sell-through. I think when you think about 2021, we would expect to be up slightly versus 2020, and that's really going to be the continued supply chain efficiencies, mainly around product costing, that we've seen a lot in 2020. And that's continuing into 2021. But then also, we would expect to see some improved margins from pricing as we continue to work on pulling back our promotions and discounting, primarily in the DTC front as we drive towards that continued premium brand-right growth. Those benefits in '21, though, will be largely offset by the sale of MyFitnessPal, which was a really high-margin business for us. So if you pull that out, that has a pretty dramatic offset on gross margin. And then the third-party off-price year-over-year really isn't much of a factor because we've kind of normalized that now in that 3% to 4% range mix of revenue. So again, it's really the -- for 2021, it's the supply chain efficiencies with product costing. It's continuing to pull back on promotions and discounting being largely offset by the sale of MyFitnessPal coming to our outlook of up slightly year-over-year.

Our next question comes from John Kernan with Cowen.

Yes. Excellent, and congrats on a real nice finish to the year.

Thank you, John.

Thank you, John.

Dave, you said you remain cautious in your outlook and is predicated on a weaker general macro and only moderate improvements in global retail. I'm just curious, what would compel you to start chasing into a recovery that once the pandemic starts to come to an end and normal flows in retail ensue, what compel you to really chase into a better environment? Just -- at this point, it does feel like there is some momentum on the recovery line.

Yes. I think there's a couple of things to think about there. One is that, as I mentioned, we still don't have many orders yet in hand from a timing perspective for Q4 on the wholesale side, and that's obviously a very big piece of our business. So we're being a little bit cautious from that perspective. Second, COVID is still very front and center and creating challenges around the world still at this point. And so I would say that as we go through the next couple of months and we get more visibility to Q4 orders and we get a better feel of whether the vaccination rollout and COVID is getting more and more in check, then we'll be in a better place to be able to reassess. But the third thing that I would say is I wouldn't necessarily say the word chase relative to Under Armour. We've talked about premium brand-right growth, and therefore, we are constraining demand a little bit. And so there may not be a lot of chasing to do if it's natural orders that are coming in, and we're putting the right discipline and constrain against those. That's one thing. But I don't think you're going to see Under Armour necessarily chasing within the year. And it might just be the term you used, John. So I'm not trying to pick on that, but I just want to be sensitive to our strategy and our approach this year.

And I think it's important, John, to maybe give a little bit more color around what we mean when we say constrain demand as it relates to an ability to chase. In general, as it relates to all quarters of the year, as we think about our demand planning, functionality and strategy, we are tightening the buys, the initial buys, the outer replenishment, the at-once capability. In all those buckets, we will be tightening up our buys to make sure that we are managing our inventory appropriately but also to be helping us drive the brand into a more premium positioning. So there won't be a situation, even if it opens up, where we will go and chase apart from the inventories that we have. And that's a really important strategy for us going forward.

Got it. That's helpful. Clearly, we can all see the improvements in full-price sell-through, which is great. Just Dave, you also mentioned footwear being pressured by team sports. I think everyone understands Under Armour has a big position in middle school, high school and collegiate sports. I'm just curious if you could help us quantify what the hit from team sports overall was in general for 2020 and maybe what the recovery in team sports looks like in 2021?

Well, maybe I'll lead in it, John. First of all, I want to say that it's been a horrific year for many of our young people out there. And we certainly are incredibly empathetic with all of our team sports athletes and what they've had to go through and also our individual athletes, right, as it relates to the Olympics and other events. When we look at this year, that's actually one area where we are enthusiastic in terms of 2 things. One is our innovation pipeline. We're going to be coming out with some awesome cleated product for both baseball, football and soccer here in this year that we're really, really excited about. So that's a big deal for us. And we believe that there's going to be, let's say, a back-to-school team sport season. And that is a very positive thing, we think, in the back half of the year. Dave, do you want to give a little color, too?

Yes. I think the only other thing I would add is that the team sport business was also one that was pretty heavily impacted in Q4 of '20 with the timing shifts we talked about from Q4 '20 into Q1 of '21. So I think just keeping that in mind as well when we think about '21 versus '20.

Our next question comes from Randy Konik with Jefferies.

Yes. Dave, I just wanted to first clarify on the annual revenue guide for 2021 based on the guidance you gave for the first quarter, it seems like it's implying almost a flattish back half of the year. And I think it sounds like you're saying you're trying to be conservative or be cautious given the order patterns haven't started effectively yet for the back half. But can you kind of give some sense of where the inventory levels are with your various wholesale accounts? Because it appears to me that they seem to be very, very lean. So if there's an event where the consumer feels a little bit stronger and your product is starting to resonate a little bit better, the inventory kind of compare with these accounts for the back half is pretty, I guess, easy or compelling such that you could probably see some growth there. So just curious on how you think about that.

Yes, Randy. I mean, what you're pointing out is fair. Within our wholesale partners, we are in a little bit of a lean spot from inventory levels as we went into '21. And you're right that, that could increase. And I mean, that could actually give us a little bit of momentum when we think about Q1 and Q2. But when you think about Q3, Q4, to your point, I do want to remind us that a lot of the headwinds that we've talked about relative to driving premium brand-right growth, a lot of those have a heavier impact on the back half. Some of them are full year, like when you think about MyFitnessPal not being in the numbers for 2021, that's a full year impact. But when we think about the demand-constraint work, that's a little bit more back half as well. Especially when you think about exiting the undifferentiated retail in North America, that is clearly a back half impact, not really a front half impact. And then even the business model changes in Latin America, although they're not significant in size, moving out of some of those countries into distributor models, it's going to happen as we move through the year. And therefore, you'll get a more full impact of that on revenue in the back half of this year. And we're moving towards really getting to a point in Latin America where Mexico is the only remaining kind of full subsidiary business versus the other countries being more of a distributor model. So again, that will have some pressure in the back half but should help improve margins. And then to your point, again, we probably are being a little bit prudent and cautious here, especially with Q4 planning because we don't have visibility of the order bank yet. And then we're still keeping an eye on COVID implications. So I think we're being prudent in how we're planning and making sure that we're not getting ahead of ourselves in spending because we think revenue might be different. Right now, this is what we feel good with.

I think that's very fair. And again, the theme of discipline is clearly coming through with your words and also, more importantly, the numbers in the quarter. So on that, can we talk a little bit, maybe quantify a little bit more for us maybe some specific examples where you've worked on SKU count reduction across the board. It sounds like it's having a positive effect. Can you just maybe give us a little bit more quantification on maybe a category or a product to give example of changes in product sell-through? How is it now versus last year just because of these changes in SKU count reduction? Just be, I think, helpful to us to frame out the actual productivity improvements you're starting to see within the inventory assortment.

Yes, Randy, it's Patrik. I'll start, and I'll hand it over to Dave. I just want to give a little bit more color on the history because I think that's important to bear in mind. We started our SKU reduction journey 3, 4 years ago. And we never allowed it to come back or blow back up. Having said that, there are certain areas that we are investing a little bit more heavily into, things like run, in our run category, our footwear category, our women's category. Those are areas where we are being a little bit more liberal with increasing SKUs. But we're not doing it without the expectation of productivity. And I feel that our -- the way that we think about our SKUs now building through the year is the right mix between initiatives that drive brand and initiatives as it relates to product that drive volume and ultimately also margins. So I think we're well balanced right now as we go into 2021. I expect it to continue to evolve as we go into '22 and beyond in certain areas. But the balance right now for '21 is right. I don't know if you want to add something there, Dave?

No, I think you covered it pretty well, Patrik. I don't think at this point, we're going to get into really quantifying. We'll probably be more in a point to quantify as we come to the next call.

Got it. And last quick one is in our research, we're starting to see an inflection in terms of looking at athletic styling from fashion more towards performance. And you guys have always talked about your view of staying disciplined in who your customer is, a focused performer. Can you comment on any of that? Do you see that in your -- in the industry that there's a little bit move -- more of a move towards performance styling versus fashion styling? Just curious on your thoughts there.

Yes, Randy. So this journey, again, has been consistent. It's been based on not just art but also science with a good balance between the 2. And I think during the COVID time, what we've seen is people really starting to use apparel in a different way. There's certainly a big influx of that leisure still going on. I think a lot of that has been moving over, shifting over from more of the ready-to-wear kind of high street, if you like, into more comfortable stuff that you just simply wear at home. But there's also been a resurgence in terms of fitness, personal fitness and general wellness. That is certainly driving innovation. It's driving an aptitude for performance in the garment. And as you think about Under Armour, that's the whole point, right? We're an authentic athletic performance brand. Our mission is to make you better. We're building performance solutions you didn't know that you need and once you have them can't imagine living without. And we're doing that better than anybody else. So if you want to have -- if you really want to get better, Under Armour is the brand for you. And I think that's what you're starting to see now as people are willing to invest a little bit more to get the right product to help them on that journey. And that's our job here at Under Armour, job #1. And we'll continue to believe that, that is the right direction for us going forward. And I believe the consumer is now going there more often than before.

I think, Randy, to maybe just point out, too, is as excited as we are about driving with our DNA and the performance aspect of our product, we also need to make sure that it's always beautiful product. And that's something I think we're doing better and better as well. And we're excited about the consumer reaction from that front also.

Our next question comes from Tom Nikic with Wells Fargo.

So I like to ask about the exit of the North America wholesale doors. I'm just kind of wondering, when you think long term, do you think any of those sales get recaptured in any of your other channels? If so, do you think it's in your DTC channel or in strategic wholesale? I guess I'm just kind of thinking you make up any of the lost revenue elsewhere?

Tom, this is Patrik. The way that we think about our distribution model and our omnichannel approach, if you like, is really through the eyes of the consumer. So the way that Under Armour drives our decisions around where we should be, when we should be there, how much we should have, it really is around the consumer journey, ultimately. And I think we see an opportunity to refine our model in terms of where we should be investing. We will do so. And that's also one of the reasons why direct-to-consumer is important for us is because the consumer expects that seamless omnichannel opportunity. And we, as a brand, also want to make sure that when we have an opportunity to connect with the consumer, we show up in the best possible way to engage the consumer, to drive consideration, to drive conversion. So the decisions that we make are based on that. So to answer your question around growth, our growth in the future comes with the consumer. So ultimately, the ways that we are figuring out how to do that is the part of the journey. And we don't believe that undifferentiated retail necessarily is going to help us get there. So it is about having that direct conversation with the consumer more frequently in a better way and truly understanding what they are expecting us to deliver. And if we do that well, we'll continue to make progress.

Understood. And Dave, if I could ask, I guess, a balance sheet question for you? And I think you never had as much cash as you have right now. I think even net of the $1 billion of debt, your net cash position, I think, is the highest that the company's ever seen. How do you think about using that cash? Or do you think about saving it for a rainy day or paying down the debt that you have on the balance sheet? I'm just kind of wondering how you think about that?

Sure. At this point right now, we're just very happy to be in an extremely liquid position and have an excellent foundation to be able to drive through '21 and beyond and be nimble through any lingering impacts of COVID. So I would say until we get further past COVID, we're very content with just staying very, very liquid right now. As we get further into the future, we could consider some debt buyback or some other things. But in general, right now, it's not burning a hole in our pocket by any means, I'll tell you that. And we're comfortable staying very liquid and very nimble and having some optionality as well.

Our next question comes from Simeon Siegel with BMO Capital Markets.

Really, congrats on the ongoing progress. Patrik, as you continue to elevate the brand, could you speak to how you're thinking about the AUR opportunity from here? And then, Dave, just any color you could provide on the expectations for the price -- sorry, the pricing and supply chain benefits in '21? Any way to give some order of magnitude for the gross margin opportunity there for next year and beyond?

Yes. Sure, Simeon. Yes. So when you think about the AUR opportunity for Under Armour, it comes in a couple of different areas. One, of course, is putting the right amount of product into right place with the right aesthetic, as Dave said, and the right performance. But it's also through inventory management as it relates to all of our different channels of distribution, ensuring that we're not driving excess, making sure that we are marketing it in the right way and ultimately, making sure that we're innovating in the right way to excite the consumer. So for us, it's a holistic approach to driving those AURs up. And what we've seen, as we talked about on this call, the back half of 2020, that is the thing that we're starting to see that we're very excited about. What's exciting, too, is the fact that it's happening across categories. So it's not just in one place. We're seeing the rise of AURs across the business, and I think that is a sign of the brand starting to return to health. Now it's a journey. It's a step-by-step process. And we'll continue to make progress this year and into next year. And we're very excited about our initial reads as we think about what this could make the brand do in future seasons as it relates to both the margin and brand premium. So I don't know if you want to add something there, Dave?

I mean, I guess, just following up on your second part of your question on gross margin. The supply chain benefits is something that we're -- we've been seeing, which has been great, and we're continuing to see that. And I would say that on the supply chain front, you're probably in 2021, I won't give an exact number, but it's more than 50 basis points of improvement, probably less than 100 basis points of improvement. So it's in that range. But remember, that's going to be significantly offset by the MFP sale, which is a very large impact year-over-year in gross margin percentage points. When you think about '22 and beyond, we're not ready to get into a lot of detail there, but we do expect to see some continued product costing improvements. But you're going to start to normalize that cost base with the supply chain fairly soon. So that benefit will start to get smaller as we think about '22 and beyond. And then from a pricing perspective, definitely a decent benefit there as well. It's probably in a similar range to what we're anticipating on the supply chain benefit side. So hopefully, that triangulates a little bit for you.

Our next question comes from Omar Saad with Evercore.

I wanted to ask a follow-up question around the North America core apparel business. You guys mentioned on the women's side, bras and bottoms. Maybe dive into what's going on in the women's apparel business a little bit more. Anything happening on the men's side worth getting excited about? And then I have a quick follow-up on Asia-Pac and China.

Yes. This is Patrik. What we're excited about in apparel in men's is the continued success that we're having, of course, with some of our collaborations like Project Rock, which is -- continues to work really well for us. Every launch we do there is a moment, and it continues to do really well. But we're also continuing to expand both our HeatGear and our ColdGear product with new innovation. And our rush product has now started to really become a staple, which has helped us segment our business and also to expand it into a broader offering, which we're very excited about. And there's a lot of technology that goes into also some of the bottoms for men that we're going to continue to see being launched here in 2021. So there's a lot of things happening in the first half as it relates to that. In the second half in the ColdGear category and the outerwear category, we're also going to see a lot of newness in the brand and a lot of new innovation. So there's just a tremendous amount of core product for men that continues to evolve and resonate with the consumer. And that's what we're seeing in the back half of the year. We tend to talk a lot about women's right now because we're excited about the progress that we've made there, especially as it relates to our Meridian line and our Infinity Bra. So both are -- I would say across our bottoms and our tops for women's, it's really a very positive story for us. And we believe that's going to continue in 2021. And then, of course, in terms of our footwear, our new cushioning platform, UA Flow that was launched with the Curry 8 recently, which is doing really well, now comes into play in running. And that's going to give us also much more optionality in terms of continuing to build on the top of the pyramid, if you like, and really gives us optionality in terms of segmentation and broadening our appeal to the core runner. So a lot of excitement for 2021 in product in general.

Got it, Patrik. That's helpful. And then quickly on China and Asia-Pac. Obviously, it's a strong performing market. Can you help us disaggregate what's COVID recovery related, the fact that the lockdowns there haven't been as severe versus kind of the underlying brand strength? Can you disaggregate those dynamics? And again, kind of remind us where you are in China and where you want to be?

Yes. I mean, I think you probably need to break it down a little bit between front half and back half for 2020, right? Front half was significantly impacted by COVID very quickly in Q1 and then still pretty holistically in Q2. And those quarters were down 34% and 20%, respectively. And then as the regions start to get a little bit past COVID, the brand strength continue to pull the business back up. And we saw a lot better trending in Q3 and Q4. And as we look forward here into 2021, we feel good about the partnerships. We feel good about the door expansion plan that we're driving through. And we're also kind of rebuilding the APAC due to the COVID impacts from the front half of 2020. So I think we're in a good spot. We're continuing to drive forward with the plan. The plan hasn't significantly changed, but we definitely hit some holes in Q1 and Q2 of '20 relative to COVID.

Our last question comes from Bob Drbul with Guggenheim Securities.

I guess the question I have -- congratulations, great progress. Can you just spend a little time on the supply chain, I guess, both what you're seeing as you bring product in and some of the issues or challenges, but also where you are internally, especially around the digital business and how you see that playing throughout this year? That would be helpful.

Yes. Bob, it's Patrik. I think to start with the supply chain, it's one of the things that we called out as well in terms of how we are now able to navigate the most difficult circumstances because of the tightness that we have in our supply chain and the ability we have for optionality there. We did an incredible job, and the team did a fantastic job in 2020 to quickly come to terms with the situation of COVID-19 and really from an operations perspective, as it relates to all of our vendors, work very tightly with our vendors to ensure that they survived, but also to navigate the transportation issues that became quite severe throughout the year. And now as we turn our attention into 2021, we feel that we are doing a good job again of making sure that we're planning our business the right way and ultimately, supporting that with making sure that we're not getting into trouble as it relates to transportation or inventory position. So feeling confident about our ability to navigate the 2021 environment. Dave, do you want to add something?

No, I think you covered it pretty well. I mean, obviously, there is a little bit of pressure there right now with COVID. We're experiencing some port congestion, some container availability challenges. But our supply chain teams are on it, and they're managing through it very well. So we feel good about being able to continue to drive through the year.

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