Under Armour Inc’s (UA.N) quarterly sales jumped 30 percent because the company’s new under armour shoes australia by NBA star Stephen Curry and golfer Jordan Spieth were a large hit with customers.
Shares of the company, that 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 % for the past six years, helping the company replace Germany’s Adidas (ADSGn.DE) as being the No. 2 sportswear maker in america this past year. Nike Inc (NKE.N) may be the market leader.
“The recent market fears about the apparel slowdown were unfounded while they demonstrated another quarter of 20 % growth, and gross margins were far 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 inside the first quarter ended March 31, as increasing numbers of customers bought its training and golf clothing. Apparel accounts in excess of 60 % of the company’s total revenue.
Footwear sales jumped 64 percent to $264.2 million on strong demand 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 said it expected sales inside the second quarter to increase in the “high 20s” percentage range, and gross margins to get little changed in comparison with this past year.
Under Armour’s gross margin fell to 45.9 percent from 46.9 percent within the latest quarter, hurt by higher discounts and also 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 could possibly be optimistic that its second-quarter outlook could show to be conservative.
The under armour shoes sydney raised its full-year sales forecast to around $5. billion from about $4.95 billion. Operating income for 2016 has become anticipated to be $503-$507 million, in contrast to its prior forecast around $503 million.