With second quarter earnings up 160 percent year-over-year, Under Armour (UA) has affirmed its status as one of the hottest apparel brands in the world. During its second quarter earnings call Thursday morning, the company indicated that its shoe offerings are signaling accelerated growth and consumers are buying more athletic clothing. The news lifted shares to fresh all-time highs.
Under Armour reported net income of $17.6 million, or $0.16 per share, versus the $6.7 million, or $0.06 per share, from the same period a year ago. Revenue for the quarter was $454.5 million, as compared to $369.5 million from the previous year, a 23 percent increase. Analysts were expecting a profit of $0.14 per share on revenues of $449.1 million.
Apparel sales increased by 23 percent, driven by strength in the new baselayer product and success in Under Armour's Storm and Charged Cotton lines. Shoe sales were also strong, posting a 21 percent increase led by football cleats and UA Spine running shoes.
“While we continue to see great momentum in our apparel business, we are demonstrating share gains in footwear on the field with baseball and football cleats, as well as building upon our momentum in running footwear,” said CEO Kevin Plank.
The Baltimore-based company also reaped the benefits of lower costs, as gross margins rose from 45.9 percent to 48.3 percent. Moreover, these gross margins ousted top competitor Nike (NKE) , which posted 43.9 percent gross margins during its most recent quarter.
Under Armour also raised its revenue outlook for the coming year from $2.21 billion-$2.23 billion to $2.23 billion-$2.25 billion. By the end of the year, the company is set to release ColdGear Infrared, which allows athletes to stay warmer for longer, and Speedform, a new running shoe that will “redefine fit in the category.”
With football and basketball season around the quarter, “we are set up for a strong second half of the year,” said Plank. “Exciting product introductions, along with the existing platforms we continue to build, highlight the ongoing strength of our pipeline and increase our conviction in achieving long-term global ambitions.”
On the bullish report, Under Armour shares spiked 11 percent to $68.65. Shares are up 41 percent year-to-date and reached new all-time highs during the trading session on Thursday.