Under Armour Inc’s (UA.N) quarterly sales jumped 30 percent because the company’s new under armour outlet by NBA star Stephen Curry and golfer Jordan Spieth were a major hit with customers.
Shares of the company, that also raised its full-year 2016 sales forecast, rose around 8.7 percent in morning trading on Thursday.
Under Armour’s quarterly sales have risen by no less than 20 percent over the past six years, helping the company replace Germany’s Adidas (ADSGn.DE) since the No. 2 sportswear maker in the United States this past year. Nike Inc (NKE.N) may be the market leader.
“The recent market fears concerning the apparel slowdown were unfounded since they demonstrated another quarter of 20 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 twenty percent to $666.6 million within the first quarter ended March 31, as more customers bought its training and golf clothing. Apparel accounts in excess of 60 percent of your company’s total revenue.
Footwear sales jumped 64 percent to $264.2 million on strong need for the company’s under armour online, Curry One and Curry Two basketball shoes and Spieth’s newly-launched Drive One golf shoes.
Under Armour said it expected sales inside the second quarter to develop from the “high 20s” percentage range, and gross margins being little changed in comparison with this past year.
Under Armour’s gross margin fell to 45.9 percent from 46.9 percent from the latest quarter, hurt by higher discounts as well as 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 be optimistic that its second-quarter outlook could show 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 anticipated to be $503-$507 million, in contrast to its prior forecast around $503 million.