US: Under Armour "bullish" in full-year guidance rise
- Q2 profit flat at $18m
- Revenues jump 34% to $610m
- Analyst views FY outlook as "bullish"
Under Armour was "encouraged" by the response in its footwear and international businesses
An increase in projected full-year earnings and revenue at Under Armour has been described as "bullish" and a "positive catalyst" move by one analyst.
The performance apparel, footwear and accessories brand said net income amounted to US$18m in the three months to 30 June, unchanged from the prior year period, due to planned marketing and innovation expenses.
Net revenues jumped 34% to $610m from $455m a year ago. Apparel revenues grew 35%, and footwear revenues increased 34%, with its Highlight ClutchFit and SpeedForm "resonating" with consumers. International revenues, which represented 8% of total sales, grew 80% year-on-year.
Gross margin improved slightly to 49.2% from 48.3% last year, driven by favourable year-over-year sales mix and product margins.
"The broad-based momentum that we have been experiencing recently showed no signs of stopping during the second quarter," said chairman and CEO Kevin Plank.
"While we continued to add more dimension to our largest growth driver in apparel, we were particularly encouraged by the brand response we are seeing in both our footwear and international businesses."
The company now expects full-year revenue to range from $2.98-3bn, compared to its earlier guidance of $2.88-2.91bn. Operating income is forecast to reach $343-345m, up from its earlier guidance of $331-334m.
UBS analysts viewed the significant rise as "bullish" considering the second quarter represents its lowest volume. Michael Binetti, Steven Strycula, and K.C. Stumbaugh said: "In our recent meetings, Under Armour commented that it prefers to spend back any upside this year to make growth plans for 2015 'bulletproof'.
"A big revenue guidance increase in second-quarter together with Under Armour's history of giving early guidance for the out-year on its third-quarter call puts another clear positive catalyst on the calendar for Under Armour, in our view."
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