UPDATE 3-Shoes help Under Armour run up stronger profit

* First-quarter EPS 8 cents vs Street's view 3 cents

* Revenue up 27 pct

* Shares rise 12 percent (Adds company, analysts' comments, background, stock action, byline)

By Ben Klayman

CHICAGO, April 28 (Reuters) - Under Armour Inc (UA.N) posted a stronger-than-expected 38 percent increase in quarterly profit on Tuesday, driven by a new running shoe launch and a rebound in apparel sales, sending shares up 12 percent.

However, the company -- known for fabrics that draw sweat away from the body -- remained cautious about its business outlook for the year.

"We have not assumed an improvement in the environment this year and are planing our business conservatively," Chief Financial Officer Brad Dickerson said on a conference call.

Net income in the first quarter rose to $3.96 million, or 8 cents a share, from $2.87 million, or 6 cents a share, a year earlier. Analysts on average had expected earnings of 3 cents a share, according to Reuters Estimates.

"It's hard to find things not to like," Stifel Nicolaus analyst Tom Shaw said. "The business in this economy looks strong."

Shaw, who has a "hold" rating on the stock, cited unexpected apparel sales growth, a strong running shoe launch and good expense control and inventory management.

Earlier this year, Baltimore-based Under Armour introduced running shoes, part of a long-term strategy to keep expanding beyond apparel and compete more directly with industry giant Nike Inc. (NKE.N)

Under Armour's sales in the quarter rose 27 percent to $200 million, above the $181.6 million analysts had forecast. Footwear revenue surged to $56.9 million from $16.6 million on demand for the new running shoe as well as the non-cleated Performance Training shoe introduced last year.

"The athletic footwear market represents an enormous growth opportunity," Chief Executive Kevin Plank said on the call.

Still, company officials said the first quarter would be the largest for the running shoe this year and they expect the training footwear business to be down in 2009.

Under Armour also said it would introduce a soccer boot this spring in the United States and Europe and has no designated date to introduce into stores its basketball shoes, which are already being used by certain teams and players.

Meanwhile, apparel sales rose 2.4 percent to $132.2 million, largely at full price according to Plank. Stifel's Shaw had expected a decline of 2.5 percent, while Morgan Stanley had forecast a drop of 2.2 percent.