Under Armour Shares Rise as Company Beats Estimates

Shares of Under Armour were heading higher on Tuesday after the sport apparel company reported a quarterly profit that beat estimates.

The sportswear maker saw its Class A common shares rise nearly 4% on the report, despite the company also revealing a dismal forecast for its current quarter revenue for North America.

For the fourth quarter, the pivotal holiday period, the company reported earnings per share of 9 cents, excluding one-time items. Analysts had been expecting 4 cents according to IBES data from Refinitiv. Total revenue rose 1.5 percent to $1.39 billion, slightly past estimates of $1.38 billion.

Adjusted gross margins saw a jump of 160 basis points to 45.1 percent, while analysts had expectations of 44.8 percent.

North America sales saw a decrease of 6 percent.

“It would appear that Under Armour has hit a ceiling domestically,” Nomura Instinet analyst Simeon Siegel remarked.

Looking ahead, the company has reiterated its recent 2019 outlook. Under Armour expects full year earnings in the range of 31 to 33 cents per share and revenue growth in the region of 3% to 4%.

“Our 2018 results demonstrate significant progress against our multi-year transformation toward becoming an even stronger brand and more operationally excellent company,” said CEO Kevin Plank.

He added, “As we look ahead to 2019, our accelerated innovation agenda, disciplined go-to-market process and powerful consumer-centric approach gives us increasingly greater confidence in our ability to deliver for Under Armour athletes, customers and shareholders.”

Disclaimer: We have no position in Under Armour Inc Class A (NYSE: UAA) and have not been compensated for this article.