Under Armour Surges Most After Bucking Holiday BluesMatt Townsend
Under Armour Inc., the maker of athletic apparel and shoes, jumped 23 percent to a record after blowing past analysts’ sales estimates during a fourth quarter when many U.S. brands and retailers struggled.
The shares closed at $104.76 in New York, the highest since the company’s initial public offering in 2005. Under Armour rose 80 percent last year, compared to a 30 percent gain for the Standard & Poor’s 500 Index.
Chief Executive Officer Kevin Plank has boosted sales by more than 20 percent in each of the past 15 quarters by expanding a brand he founded on football workout shirts into apparel, shoes and equipment for a bevy of sports and activities. To continue that growth, the company is pushing overseas, highlighted by signing deals with soccer teams in Mexico, Chile and the U.K.
Revenue increased 35 percent to $682.8 million for the quarter ended Dec. 31, the Baltimore-based company said today in a statement. That topped the average analyst estimate of $620 million by 10 percent. The holiday shopping season in the U.S. turned out to be lackluster for several companies, including discounter Family Dollar Stores Inc., lingerie seller L Brands Inc. and luxury handbag maker Coach Inc.
Under Armour withstood the softer retail landscape in the fourth quarter, driven by sales of cold-weather gear and footwear, Matthew Boss, an analyst for JPMorgan Chase & Co. in New York, wrote today in a note to clients. Boss has a neutral rating on Under Armour shares.
Net income rose 28 percent to $64.2 million, or 59 cents a share, from $50.1 million, or 47 cents, a year earlier. That surpassed analysts’ projections of 53 cents.
The company also forecast sales and profit for this year above analysts estimates. Revenue will increase as much as 23 percent to $2.87 billion, topping estimates for $2.77 billion. Operating income will grow by as much as 24 percent to $329 million, surpassing projections of $326.7 million.