Under Armour Inc. (NYSE: UA) released its fourth-quarter earnings report this morning and the result surprised analysts, easing fears that the company’s growth was slowing down.
The company reported Q4 EPS of $0.48, $0.02 better than the analyst estimate of $0.46. Revenue for the quarter advanced to $1.17 billion, compared to analysts’ estimate of $1.12 billion.
The report also showed that apparel sales rose 22.2% to $864.8 million in fourth quarter, better than consensus estimates of $847 million. Footwear sales rose 94.5% to $166.9 million, above consensus estimate of $136 million.
The result surprised many analysts, who had been concerned that the company might suffer from huge inventory and slower sales in Q4 because of the warm weather this year. Earlier this month, many financial institutions downgraded Under Armour. Piper Jaffray on Jan 26 lowers Price Target to $64 from a previous price target of $88. Deutsche Bank on Jan 26 also lowers Price Target to $95 from a previous price target of $110. 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.
The strong growth thanks in the success of basketball sneakers Curry Two. Stephen Curry, the NBA’s reigning most valuable player, is becoming more and more famous, especially in Asian China. Stephen Curry tour in Asian and opening of largest international brand house in Shanghai have helped drive strong demand for Under Armour brand In Asia-Pacific
The company expects its strong growth to continue. It expects a 25 percent increase in revenue to $4.95 billion this year. Analysts had projected $4.9 billion on average.
The shares jumped as much as 20% to $82.27 in the morning.