Under Armour Inc’s (UA.N) quarterly sales jumped 30 percent as being the company’s new under armour store by NBA star Stephen Curry and golfer Jordan Spieth were a huge hit with customers.
Shares in the company, that raised its full-year 2016 sales forecast, rose up to 8.7 percent in morning trading on Thursday.
Under Armour’s quarterly sales have risen by at the very least twenty percent within the last six years, improving the company replace Germany’s Adidas (ADSGn.DE) as the No. 2 sportswear maker in the United States just last year. Nike Inc (NKE.N) may be the market leader.
“The current market fears about the apparel slowdown were unfounded since they demonstrated another quarter of twenty percent growth, and gross margins were superior to 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 from the first quarter ended March 31, as increasing numbers of customers bought its training and golf clothing. Apparel accounts for over 60 percent of 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 said it expected sales within the second quarter to grow inside the “high 20s” percentage range, and gross margins being little changed compared with a year ago.
Under Armour’s gross margin fell to 45.9 percent from 46.9 percent within 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 might be optimistic that its second-quarter outlook could prove 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 comparison with its prior forecast around $503 million.