Under Armour defies expectations as revenue jumps 31pc
Under Armour, the number two US sportswear maker, yesterday reported a better-than-expected 31pc jump in revenue, allaying concerns that apparel sales were slowing, sending its stock up as much as 21pc.
The company's shares were up 19.3pc at $81.84 in heavy trading after it also forecast full-year 2016 revenue above Wall Street estimates.
Analysts and investors have been spooked by results from US department stores and sporting goods retailers, such as Macy's and Dick's Sporting Goods, who had warned of poor sales during the holiday quarter.
Dick's Sporting Goods, Under Armour's biggest customer, cut its same-store sales expectations for the US holidays in November, saying it was seeing lower demand for apparel and footwear.
But Under Armour's sales of apparel rose 22.2pc to $864.8m in the fourth quarter, driven by demand for training, running, golf and basketball clothing. Apparel accounts for nearly three-quarters of the company's total revenue.
"The growth last quarter affirms that the momentum continues for them. Even apparel continues to be very strong, which people had thought would slow by now, but it hasn't," FBR Capital Markets analyst Susan Anderson said.
Under Armour has been quick to cash in on the new trend of "athleisure", a mash-up of athletic and casual clothing growing popular even in formal settings like offices, which has helped it maintain a revenue growth momentum of more than 20pc for 23 straight quarters. Sales were boosted by sponsorship deals with Premier League club Tottenham Hotspur, basketball star Stephen Curry and golfer Jordan Spieth. (Reuters)