Jan 28, 2016
Under Armour demand continues to soar, stock leaps
Jan 28, 2016
Under Armour Inc reported better-than-expected quarterly profit and revenue, helped by strong demand for its sports apparel, new launches in running and basketball shoes, and growth in its direct-to-consumer channel.
Shares of the No. 2 U.S. sportswear maker rose as much as 13.5 percent to $77.84 in premarket trading, after it also forecast full-year 2016 revenue above Wall Street estimates.
Under Armour has been quick to cash in on the new trend of "athleisure," a mash-up of athletic and casual clothing growing popular even in formal settings like offices, which has helped it boost sales of its athletic apparel and footwear.
Quarterly revenue rose 31 percent to $1.17 billion, above analysts' average estimate of $1.12 billion.
Håkon Helgesen, an analyst at retail research firm Conlumino, termed the net revenue growth "impressive" as it came despite the fact that quarterly growth has remained above 20 percent for over two years.
Sales of apparel, which accounted for nearly three quarters of the company's total revenue, rose 22.2 percent to $864.8 million in the fourth quarter, helped by strong demand for training, running, golf and basketball clothing.
The company's sponsorship deals with popular sports personalities such as basketball star Stephen Curry and golfer Jordan Spieth have also boosted demand for its sports footwear and apparel.
Footwear sales nearly doubled to $166.9 million, boosted by new launches in running footwear and demand for NBA-star Curry's signature basketball shoe line.
Revenue from the direct-to-consumer channel, which includes company-owned stores and Under Armour's websites, grew 25 percent in the quarter. The channel accounted for 36 percent of total revenues.
Under Armour, which provides kits for English Premier League club Tottenham Hotspur, has beaten analysts' estimates for profit and revenue for nine straight quarters.
The Baltimore, Maryland-based company forecast full-year 2016 sales of $4.95 billion and operating income growth of 23 percent.
Analysts on average expect full-year 2016 sales of $4.91 billion, according to Thomson Reuters I/B/E/S.
The company's net income rose 20.4 percent to $105.6 million, or 48 cents per share, in the fourth quarter ended Dec. 31, higher than the average analyst estimate of 46 cents per share.
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