New sport shoes drive Under Armour revenue jump
today Apr 21, 2016
Under Armour Inc reported a 30 percent jump in quarterly sales as its new sport shoes endorsed by NBA star Stephen Curry and golfer Jordan Spieth were a big hit.
Under Armour has reported quarterly sales growth of at least 20 percent for the past six years, helping it overtake German footwear maker Adidas as the No. 2 sportswear maker in the United States last year.
Shares of the company, which also raised its full-year 2016 sales forecast above analysts' estimates, were up 4 percent at $45.50 in premarket trading on Thursday.
Under Armour's sales of sports and outdoor apparel rose 20 percent to $666.6 million in the first quarter ended March 31, driven by demand for training and golf clothing. Apparel accounts for more than 60 percent of the company's total revenue.
Footwear sales jumped 64 percent to $264.2 million on strong demand for SpeedForm running shoes, Curry One and Curry Two basketball shoes and Drive One golf shoes.
Under Armour's gross margin fell to 45.9 percent from 46.9 percent, hurt by higher discounts and the strong dollar. However, margins still came above the average analyst estimate of 45.4 percent, according to Thomson Reuters StarMine.
The company raised its full-year sales forecast to around $5.0 billion from about $4.95 billion. Operating income for 2016 is now expected to be $503-$507 million, up from the company's prior forecast of about $503 million.
Analysts on average expected 2016 revenue of $4.98 billion, according to Thomson Reuters I/B/E/S.
The company's net income rose to $19.2 million, or 4 cents per share, from $11.7 million, or 3 cents per share, a year earlier.
Revenue rose 30 percent to $1.05 billion.
Analysts on average expected 2 cents on revenue of $1.04 billion.
Baltimore, Maryland-based Under Armour's shares had risen 34.5 percent since Jan. 20 when they hit a 52-week low.
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