Under Armour raises outlook on strong footwear sales
(Reuters) - Under Armour Inc (UA.N) reported better-than-expected earnings and raised its full-year sales forecast as it builds on the success of its footwear range, lifting its shares to an all time high.
Under Armour's shares were up nearly 12 percent at $54.15 on Tuesday on the New York Stock Exchange. They touched a high of $54.65 in early market trade.
The apparel and footwear maker, whose sales have benefited from new styles such as ColdBlack and Armour Bra, raised its full-year revenue forecast to $1.80-$1.82 billion from $1.78-$1.80 billion.
Under Armour, known for clothing that draws sweat away from the body, said higher orders for running and training shoes are boosting sales for its footwear business, allaying concerns of slowing demand.
Larger rival Nike Inc (NKE.N) reported a weaker-than-expected quarterly profit last month, fueling concerns about cooling demand for athletic and running shoes.
Sales for the company's footwear business, which represents about 19 percent of total revenue, surged 44 percent in the second quarter.
Under Armour is attracting shoppers with products such as its $130 Highlight football cleat and its recently launched UA Spine running shoes.
Inventory growth trailed revenue growth for the first time in eight quarters. Inventory at quarter end increased 22 percent to $381 million, while revenue rose 27 percent to $369 million.
Second-quarter earnings rose to $7 million, or 6 cents per share, from $6 million, or 6 cents per share, a year earlier.
Analysts on average had expected earnings of 5 cents on revenue of $358 million, according to Thomson Reuters I/B/E/S.
Under Armour also raised its 2012 operating income outlook to $205 million-$207 million.
However, gross margin for the quarter fell to 45.9 percent from 46.3 percent reflecting lower apparel and accessories product margins in North America.
The company expects gross margins for 2012 to remain flat or fall slightly from last year's level of 48.4 percent.
(Reporting by Juhi Arora in Bangalore; Editing by Don Sebastian and Viraj Nair)
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