Under Armour Inc’s (UA.N) quarterly sales jumped 30 percent since the company’s new under armour store by NBA star Stephen Curry and golfer Jordan Spieth were a large hit with customers.
Shares in the company, that 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 a minimum of 20 % within the last six years, helping the company replace Germany’s Adidas (ADSGn.DE) because the No. 2 sportswear maker in america this past year. Nike Inc (NKE.N) is definitely the market leader.
“The current market fears about the apparel slowdown were unfounded as they demonstrated another quarter of twenty percent growth, and gross margins were a lot 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 more customers bought its training and golf clothing. Apparel accounts for over 60 % in the company’s total revenue.
Footwear sales jumped 64 percent to $264.2 million on strong interest in the company’s under armour sale, 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 cultivate in the “high 20s” percentage range, and gross margins being little changed in comparison with a year ago.
Under Armour’s gross margin fell to 45.9 percent from 46.9 percent inside the latest quarter, hurt by higher discounts and the strong dollar. However, margins still topped analysts’ estimate of 45.4 percent, as outlined by 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 end up being conservative.
The under armour shoes raised its full-year sales forecast to around $5. billion from about $4.95 billion. Operating income for 2016 is now supposed to be $503-$507 million, compared to its prior forecast of around $503 million.