Under Armour Inc’s (UA.N) quarterly sales jumped 30 percent as the company’s new under armour outlet by NBA star Stephen Curry and golfer Jordan Spieth were a big hit with customers.
Shares in the company, which also raised its full-year 2016 sales forecast, rose as much as 8.7 percent in morning trading on Thursday.
Under Armour’s quarterly sales have risen by at least 20 percent within the last six years, helping the company replace Germany’s Adidas (ADSGn.DE) as being the No. 2 sportswear maker in america last year. Nike Inc (NKE.N) may be the market leader.
“The recent market fears concerning the apparel slowdown were unfounded as they demonstrated another quarter of twenty percent growth, and gross margins were much better than 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 in 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 sale, Curry One and Curry Two basketball shoes and Spieth’s newly-launched Drive One golf shoes.
Under Armour said it expected sales within the second quarter to cultivate in the “high 20s” percentage range, and gross margins being little changed compared with last year.
Under Armour’s gross margin fell to 45.9 percent from 46.9 percent from 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 since the company beat 17dexjpky forecast for gross margins, investors could possibly be optimistic that its second-quarter outlook could turn out 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 already likely to be $503-$507 million, in comparison with its prior forecast of about $503 million.