Why Under Armour Inc Stock Soared


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Why Under Armour Inc Stock Soared

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Why Under Armour Inc Stock Soared

  1. 1. Why Under Armour Inc Stock Soared Today
  2. 2. What: • Shares of Under Armour were racing higher today, up as much as 16% after the sportswear maker released a stellar second- quarter earnings report this morning.
  3. 3. So What: • The apparel-maker again blew past analyst estimates as revenue jumped 34% to $610 million, crushing the consensus at $574 million. Earnings per share, meanwhile, was even with a year ago at $0.08, due to increased marketing and innovation costs, but beat expectations by a penny.
  4. 4. So What: • Growth was solid across the board as apparel sales, the bulk of the company, grew 35%, footwear was up 34%, and accessories, the smallest component, increased 18%. International sales were also a bright spot, improving 80% in the quarter.
  5. 5. So What: • CEO Kevin Plank credited the company’s “broad-based momentum,” noting the success in particular of footwear and international. Though marketing expenses cooled profit growth, gross margin still expanded from 48.3% to 49.2%.
  6. 6. Now What: • Further encouraging investors, Under Armour lifted its guidance for the year. It now expects revenue of $2.98 billion to $3 billion, up from $2.88 billion to $2.91 billion, and sees operating income range of $343 million to $345 million, better than its previous forecast of $331 million to $334 million.
  7. 7. Now What: • Under Armour’s brand appeal and innovative products have helped it deliver five straight earnings beats, and the company looks poised for more strong growth as it’s still less than a quarter the market value of Nike.
  8. 8. Now What: • Shares are pricey at a P/E of 90, but Under Armour has a long growth road ahead of it, especially outside of the U.S., where rival Nike makes the majority of its money. If the company can keep growing sales faster than expectations, shares will continue to move higher.
  9. 9. Leaked: Apple's next smart device (warning, it may shock you)
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