• Q3 net income up 22%
  • Gross margin widens to 49.6%
  • Sales grow 26%
Apparel revenues were up 26% in the quarter

Apparel revenues were up 26% in the quarter

Performance apparel, footwear and accessories brand Under Armour has upped its full-year guidance as it revealed an increase in third-quarter earnings and sales.

Net income in the three months to the end of September increased 22% to US$89m from $73m in the prior year period.

Gross margin widened to 49.6% from 48.4% last year, while sales grew 30% to $938m thanks to "momentum and growing confidence" in the footwear and international divisions.

Apparel revenues were up 26% in the quarter to $705m, driven primarily by expanded offerings and platform innovations across training, golf, and outdoor.

Footwear sales increased 50% to $122m, led by new introductions in running and basketball, while international net revenues, which represented 9% of total sales, grew 94% year-on-year.

The company said it now expects 2014 net revenues of around $3.03bn, and operating income of around $348m. This compares to a previous forecast of revenues in the range of $2.98bn to $3bn, and operating profit between $343m and $345m.

UBS analyst Michael Binnetti noted: "Under Armour faces intense competition from several established global athletic and footwear brands with significantly larger budgets for product development and marketing. 

"Any deterioration in Under Armour’s ability to maintain a rapid pace of bringing compelling new product innovation to market would also be a risk for the stock."