Under Armour Inc’s (UA.N) quarterly sales jumped 30 percent since the company’s new under armour outlet by NBA star Stephen Curry and golfer Jordan Spieth were a large hit with customers.
Shares in the company, which also raised its full-year 2016 sales forecast, rose just 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) as the No. 2 sportswear maker in the usa last year. Nike Inc (NKE.N) may be the market leader.
“The current market fears concerning the apparel slowdown were unfounded as they demonstrated another quarter of 20 % 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 % 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 more than 60 percent in 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 said it expected sales in the second quarter to increase from the “high 20s” percentage range, and gross margins to get little changed in comparison with a year ago.
Under Armour’s gross margin fell to 45.9 percent from 46.9 percent in the latest quarter, hurt by higher discounts along with the strong dollar. However, margins still topped analysts’ estimate of 45.4 percent, in accordance with Thomson Reuters StarMine.
Freedman said considering that the company beat 17dexjpky forecast for gross margins, investors could 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 currently supposed to be $503-$507 million, in contrast to its prior forecast around $503 million.