Under Armour Inc’s (UA.N) quarterly sales jumped 30 percent since the company’s new under armour shoes australia 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 as much as 8.7 percent in morning trading on Thursday.
Under Armour’s quarterly sales have risen by a minimum of 20 % over the past six years, improving the company replace Germany’s Adidas (ADSGn.DE) because the No. 2 sportswear maker in the United States just last year. Nike Inc (NKE.N) is the market leader.
“The recent market fears concerning the apparel slowdown were unfounded while they demonstrated another quarter of 20 percent growth, and gross margins were much 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 within the first quarter ended March 31, as increasing numbers of customers bought its training and golf clothing. Apparel accounts for more than 60 percent from the company’s total revenue.
Footwear sales jumped 64 percent to $264.2 million on strong need 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 in the second quarter to develop in the “high 20s” percentage range, and gross margins being little changed compared to just last year.
Under Armour’s gross margin fell to 45.9 percent from 46.9 percent in the latest quarter, hurt by higher discounts and also the strong dollar. However, margins still topped analysts’ estimate of 45.4 percent, as outlined by Thomson Reuters StarMine.
Freedman said because the company beat 17dexjpky forecast for gross margins, investors could possibly 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 has become likely to be $503-$507 million, in contrast to its prior forecast of around $503 million.