Under Armour (UAA) popped over 25% Tuesday after reporting third-quarter results that well exceeded expectations. The athletic apparel and footwear brand also bumped up its profit outlook for the year.
XRaised Under Armour Earnings Guidance For The Year
Under Armour earnings grew 14% to 25 cents a share, bucking analyst expectations for a 46% decline. Meanwhile, revenue rose 2.5% to $1.44 billion, better than views for $1.41 billion, per Zacks Research. That included a sales decline of 2% to $1.1 billion in the critical North American market.
For the year, Under Armour now sees per-share profit of 19-22 cents, up from prior targets for 16-19 cents a share. Management reiterated guidance for 3%-4% revenue growth for the year, but now only sees a low-single-digit decline in North America, a slightly improved outlook from previous projections for a low- to mid-single-digit North America sales drop.
Adidas (ADDYY) has notably managed to reignite interest in its brand in North America over the last few years, and Nike (NKE) is regaining momentum in the key region. But Under Armour has lagged behind.
"While the results showed improvement and shares may react positively, in the medium term brand challenges persist and questions remain around the rate of possible sales acceleration and margin recovery, subjects likely to be explored in greater depth during the December Investor Day," wrote Wedbush analyst Christopher Svezia in a note to clients Tuesday.
By category, apparel sales grew 4% during Q3, while footwear sales were flat and accessories revenue fell 6% on weakness in outdoor and training products.
Under Armour Stock Sizzles
Shares shot up nearly 28% to 23.25 in the stock market today, definitively retaking support at its 50-day and 200-day lines.
Under Armour stock is still well off its all-time highs of 52.95, reached in September 2015, but it's moving back toward its 2018 peak of 24.69 set June 7. Its 50-day moving average in April managed to climb back above the longer-term 200-day line for the first time in a year and a half. And the stock has a Relative Strength rating of 83 out of a possible 99.
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The post Under Armour Stock Rockets Over 25% On Massive Q3 Profit Beat, Guidance Boost appeared first on Investor's Business Daily.
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