Under Armour Soars After Footwear Surge Helps Boost Profitby
Sales of sneakers nearly doubled thanks to Stephen Curry line
Company cools concerns that robust growth was slowing down
Under Armour Inc. shares rose the most in two years after surging footwear sales bolstered fourth-quarter earnings, easing fears that the company’s growth streak was cooling.
The shares climbed 23 percent to $84.07 at the close on Thursday, the biggest gain since January 2014. Before the rally, they had tumbled 34 percent since an all-time high of $104.10 in September.
Earnings rose to 48 cents a share in the period, the Baltimore-based company said. Analysts had estimated 46 cents on average, according to data compiled by Bloomberg. Sales advanced to $1.17 billion, beating the average estimate of $1.12 billion. The company, which got its start in football apparel, also gave a better-than-anticipated forecast for 2016.
The results helped reassure investors, who had been concerned that warm winter weather and slower sales to female customers would hamper growth. Earlier this month, Morgan Stanley cut its rating on Under Armour’s stock to the equivalent of sell, saying the brand is losing market share, especially among women.
Despite the mild winter, which has hurt results at other clothing companies, Under Armour’s apparel sales rose 22 percent to $864.8 million. That was in line with its growth rate in that category for the year. The company also sold a lot of shoes, thanks in large part to the success of basketball sneakers tied to Stephen Curry, the NBA’s reigning most valuable player. Footwear sales rose about 95 percent to $166.9 million last quarter and gained 57 percent for the year.
The company expects its robust growth to continue. It forecast a revenue increase of 25 percent to $4.95 billion this year. Analysts had projected $4.9 billion on average.