Under Armour’s Stock Is Jumping After It Beat Earnings Forecasts
Shares for Under Armour are gaining in pre-market trading on the heels of better than expected first quarter earnings results.
As of 7:15 a.m. ET, UA shares were in the green more than 4% to $23.
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The brand — which is in the midst of an aggressive turnaround effort following a period of softening growth — announced today that it reversed its year-ago losses to post Q1 profits of $22.5 million, or 5 cents per diluted share, topping the loss of 1 cents per share analysts had predicted. Under Armour sales also advanced 2% to $1.2 billion, beating out the $1.19 billion market watchers expected.
“Our first quarter results demonstrate our unwavering commitment to protecting and growing our premium performance athletic brand through a disciplined go-to-market process that delivers innovative products and experiences to make athletes better,” Under Armour chairman and CEO Kevin Plank said in a statement. “As we execute against our long-term plan, Under Armour will emerge from 2019 and our ‘Protect This House’ chapter as an even stronger brand and company.”
Amid heightened competition from Nike and Adidas as well as retro labels Champion and Fila, analysts have previously suggested the brand still has its work cut out for it in North America. During the 13-week period, Under Armour’s sales in the region dipped 3% to $843 million. International sales, however, continued to advance for the brand, rising 12% to $328 million.
With momentum in the run category as well as around its HOVR line, the company saw footwear sales improve 8% in Q1 to $293 million. Apparel revenues, meanwhile, edged up 1% to $775 million. Footwear revenue increased 8%. Accessories tumbled 11% to $82 million, primarily driven by planned lower sales of backpacks and bags related to a strategic relaunch of key product, the company said.
Looking ahead, Under Armour raised its profit outlook for the fiscal year. It now expects earnings per share in the range of 33 cents to 34 cents, an improvement of 2 cents on the bottom end and 1 cent on the top end of the prior range. Operating income is also expected to be $220 million to $230 million for the year — adding $10 million to the bottom end of the previous outlook. It maintained its revenue forecast calling for 3% to 4% growth.
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