UPDATE 4-Under Armour profit up; sees costs rising in 2010

* Q4 EPS 30 cents vs Street's 25 cents

* Q4 revenue up 24 pct

* Sees costs growing faster than sales in 2010

* Shares down 5.6 pct (Updates stock move)

By Dhanya Skariachan

NEW YORK, Jan 28 (Reuters) - Under Armour Inc (UA.N) posted a strong quarterly profit, but warned costs will overshadow sales growth in 2010 as it ramps up its direct-to-consumer business and makes other investments.

Shares of the athletic clothing and footwear maker were down about 5.6 percent, or $1.57, at $26.34 in afternoon trading on the New York Stock Exchange.

The company, a fast-growing rival of Nike Inc (NKE.N), makes products touted for their moisture-wicking fabrics.

Under Armour attributed most of its apparel segment's growth during the holiday season to its direct-to-consumer business. It plans to add 15 new Factory House outlet stores and invest more in its website to win more shoppers.

Its fourth-quarter net income rose to $15.2 million, or 30 cents per share, from $8.3 million, or 17 cents per share, a year earlier.

Analysts, on average, had been expecting earnings of 25 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose 24 percent to $222.2 million, driven by growth in its higher-margin men's, women's and youth apparel segments. Apparel net revenue grew 26 percent in the quarter.

Under Armour forecast a marketing budget in the range of about 12 percent to 13 percent of net revenue for this year. Under Armour will invest more in its innovation and design teams and information technology.

It forecast revenue and earnings growth of 10 percent to 12 percent in 2010, slightly above an earlier forecast.

"We believe these investments are the key to building the growth platform to drive accelerated, profitable growth in future years," Chief Financial Officer Brad Dickerson said.

Jefferies analyst Taposh Bari backed his view.

"It is not a concern. It's not a cost, it is an investment. It sets them up well for a continued earnings upside," he said.

SEES WEAKNESS IN FOOTWEAR

The company forecast 2010 revenue of $945 million to $960 million, fueled by strength in its direct-to-consumer business and higher growth in its U.S. wholesale apparel channel.

At the same time, its footwear business has lagged, with revenue in the fourth quarter falling to $8.7 million from $9.2 million a year ago. Bari said the company should benefit in 2010 as footwear becomes a smaller part of its product mix.

Under Armour said it will continue to focus on cleats and take a conservative approach to the running and training categories to better position itself for new products in 2011.

It forecast lower footwear revenue in 2010 with the most significant impact in the first and third quarters. (Reporting by Dhanya Skariachan, editing by Maureen Bavdek, Dave Zimmerman and Robert MacMillan)