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 large hit with customers.
Shares of the company, which also raised its full-year 2016 sales forecast, rose around 8.7 percent in morning trading on Thursday.
Under Armour’s quarterly sales have risen by a minimum of 20 percent in the past six years, improving the company replace Germany’s Adidas (ADSGn.DE) as the No. 2 sportswear maker in the states just last year. Nike Inc (NKE.N) may be the market leader.
“The recent market fears concerning the apparel slowdown were unfounded while they demonstrated another quarter of 20 % 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 percent to $666.6 million within 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 interest in 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 inside the second quarter to grow in the “high 20s” percentage range, and gross margins being little changed compared to last year.
Under Armour’s gross margin fell to 45.9 percent from 46.9 percent within the latest quarter, hurt by higher discounts and the strong dollar. However, margins still topped analysts’ estimate of 45.4 percent, based on Thomson Reuters StarMine.
Freedman said ever since the company beat 17dexjpky forecast for gross margins, investors might be optimistic that its second-quarter outlook could turn out to be 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 already expected to be $503-$507 million, in contrast to its prior forecast around $503 million.