Under Armor shares driven by optimistic earnings, better prospects

Under Armor shares shot up early Thursday as investors were encouraged by the sportswear maker's upbeat quarterly earnings and upward revision of its sales forecast for the year. The company said its second-quarter revenue rose 8 percent to $ 1.2 billion, just ahead of analysts' expectations for $ 1.15 billion, according to a Thomson Reuters survey.

A breakdown showed that Under Armor's investment in foreign markets, while facing heightened competition in North America, paid off. Sales in Asia-Pacific grew by 34.3%, while in Europe, the Middle East and Africa they grew by 30.8%. In North America, sales were positive, up 0.4%.

However, the company's net loss increased to $ 95.5 million, or 21 cents per share, compared to a loss of $ 12.3 million or 3 cents per share in the same period last year. Adjusting for time elements, a loss of 8 cents per share was in line with analysts' estimates.

Under Armor was among the recipients of the athleisure trend used to describe a preference for wearing more casual clothes like workout clothes outside the gym. The company was focused on its so-called sports lifestyle unit that its chief executive Kevin Plank previously called the company's greatest opportunity.

However competition from rivals like Adidas, hurt the growth of Under Armor. The company has also sought to reduce high inventory levels that have struggled to deliver to wholesalers.

"In the first half of 2018, we are moving toward the transformation of a more operationally efficient company while strengthening the power of the Under Armor brand," Plank said. "Continued improvements in our structure, systems and marketing process in our global operations position us better to provide our customers, consumers and shareholders with a more consistent and predictable solution over the long term."

In the future, the company now expects net income to grow by 3 to 4 percent over the 2018 fiscal year compared to last year, up from its prior guidance for a year. low single-digit percentage. This reflects a slightly less gloomy outlook for North America, where it is now expecting a decline in low-to-mid-digit sales, compared to its previous forecast for a mid-digit decline . Under Armor maintained its adjusted earnings guidance at between 14 and 19 cents per share.

The company unveiled a restructuring plan in February and announced that it expected charges of between $ 190 million and $ 210 million in 2018.

Under Armor shares, up 46 percent from Wednesday's close, were up 5 percent in pre-market trading.