Earnings at Under Armour Do Not Impress
The athletic apparel maker reported revenue for the third quarter of $937.8 million, which was up 30% from the same quarter one year ago.
The company’s net income was $89 million, which was 22% higher than the same quarter last year and 40 cents per share.
The three metrics all came in ahead of expectations on Wall Street, with earnings per share beating the Street by 1 penny.
Nevertheless, the stock opened trading down by 6% prior to reversing itself and paring most of the loss.
The downward move was surprising to some. One analyst from Citigroup said that although Under Armour had a high bar to reach, the shares should move up on Thursday.
Under Armour increased its fiscal guidance for 2014 on Thursday for the fourth time. The apparel maker now is expecting its revenue to be nearer $3.03 billion, which is up from its early range of at the top at $3 billion
Under Armour raised its income from operations as well for the fiscal year to $348 million, compared to a high estimate previously of $345 million.
If that forecast is reached it would amount to an increased for 2014 over 2013 of 31%.
Billionaire CEO Kevin Plank of Under Armour said the company’s plans to cross the net revenue threshold of $3 billion and achieve growth of 30% for 2014 are significant milestones for our brand. However, we believe the game has just started for us.
He pointed out a growth of 50% in the footwear division of Under Armour and an international growth rate of 94%.
Plank added that the company is proud of what it has accomplished and built and continue to look at ourselves as a brand that is much larger than revenues of $3 billion that is being project for fiscal 2014.
Under Armour predicted that sales growth in 2015 would slow to its lowest since 2009 after a rapid paced expansion that pushed the maker of football apparel into women’s clothing, footwear and electronics.
Revenue is projected to jump by 22% said the company based in Baltimore. Analysts were projecting an increase of 24%
The latest growth surge has been mainly international and women’s markets.
One analyst based in New York said that the apparel business has seen a deceleration but the international and footwear businesses grew a great deal.
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