Under Armour Inc’s (UA.N) quarterly sales jumped 30 percent because the company’s new under armour shoes australia by NBA star Stephen Curry and golfer Jordan Spieth were a major hit with customers.
Shares of 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 % over the past six years, improving the company replace Germany’s Adidas (ADSGn.DE) since the No. 2 sportswear maker in america last year. Nike Inc (NKE.N) is the market leader.
“The recent market fears about the apparel slowdown were unfounded since they demonstrated another quarter of 20 percent growth, and gross margins were far 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 in the first quarter ended March 31, as increasing numbers of customers bought its training and golf clothing. Apparel accounts in excess of 60 % in the company’s total revenue.
Footwear sales jumped 64 percent to $264.2 million on strong need for 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 increase in the “high 20s” percentage range, and gross margins to be little changed in comparison with a year ago.
Under Armour’s gross margin fell to 45.9 percent from 46.9 percent from the latest quarter, hurt by higher discounts and also the strong dollar. However, margins still topped analysts’ estimate of 45.4 percent, in accordance with 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, compared to its prior forecast around $503 million.