Under Armour Inc’s (UA.N) quarterly sales jumped 30 percent because the company’s new under armour store by NBA star Stephen Curry and golfer Jordan Spieth were a large hit with customers.
Shares of the company, which also raised its full-year 2016 sales forecast, rose just as much as 8.7 percent in morning trading on Thursday.
Under Armour’s quarterly sales have risen by a minimum of 20 % in the past six years, helping the company replace Germany’s Adidas (ADSGn.DE) since the No. 2 sportswear maker in the usa this past year. Nike Inc (NKE.N) is definitely the market leader.
“The current market fears concerning the apparel slowdown were unfounded while they demonstrated another quarter of 20 % growth, and gross margins were superior to we expected,” BB&T Capital Markets analyst Corinna Freedman said.
Under Armour’s sales of sports and outdoor apparel rose 20 % to $666.6 million inside the first quarter ended March 31, as increasing numbers of customers bought its training and golf clothing. Apparel accounts for longer than 60 % from the company’s total revenue.
Footwear sales jumped 64 percent to $264.2 million on strong requirement for the company’s under armour outlet australia, Curry One and Curry Two basketball shoes and Spieth’s newly-launched Drive One golf shoes.
Under Armour stated it expected sales in the second quarter to increase from the “high 20s” percentage range, and gross margins to become little changed compared to this past year.
Under Armour’s gross margin fell to 45.9 percent from 46.9 percent in the latest quarter, hurt by higher discounts along with the strong dollar. However, margins still topped analysts’ estimate of 45.4 percent, based on Thomson Reuters StarMine.
Freedman said considering that the company beat 17dexjpky forecast for gross margins, investors might be optimistic that its second-quarter outlook could prove to be conservative.
The under armour shoes australia raised its full-year sales forecast to around $5. billion from about $4.95 billion. Operating income for 2016 is currently supposed to be $503-$507 million, compared to its prior forecast around $503 million.