Under Armour, Inc. (NYSE: UA) on Tuesday reported better-than-expected financial results for the first quarter. But the company’s shares were trading lower in the early trading.
The company said revenue rose 6 percent to $1.19 billion in the first quarter, compared with $1.12 billion a year earlier. Analysts’ polled by Thomson Reuters had estimated revenue of $1.12 billion for the quarter.
Net loss increased to $30.2 million, or 7 cents a share, in the quarter ended March 31, 2018. Excluding certain items, the company broke even for the quarter. Analysts had projected a loss of 5 cents per share.
"Our first quarter results demonstrate measured progress against our focus on operational excellence and becoming a better company," said Under Armour Chairman and CEO Kevin Plank. "As we continue to build our global brand by delivering innovative performance products to our athletes, amplifying our story, further strengthening our go-to-market process, and leveraging our systems to create even deeper consumer connections - we remain confident in our ability to deliver on our full year targets."
The growth in sales was driven by International markets, which deliver strong growth with a 27 percent increase, accounting for 24 percent of total revenue.
Inventories climbed 27 percent to $1.1 billion in the first quarter.
“The inventory levels appear out of control,” Sam Poser, an analyst at Susquehanna Financial Group, said in a research note, according to Bloomberg, “The combination of high receivables and elevated inventory levels looks like a ticking time bomb to us.”
Under Amour shares fell more than 4 percent to $14.72 in the early trading on Tuesday.