* Q3 EPS 52 cents tops Street view of 44 cents
* Q3 revenues rise 16 pct to $269.5 mln
* Raises '09 forecast for profit, revenue, SG&A expenses
* Sees '10 EPS up high single-digit/low double-digit rate
* Shares fall 8.3 percent
(Recasts; adds 2010 view; changes headline)
By Martinne Geller
NEW YORK, Oct 27 Under Armour Inc (UA.N) posted
quarterly earnings that soared past Wall Street estimates and
raised its full-year outlook, but the forecast implied a
weaker-than-expected fourth quarter and sent the athletic
clothing and shoe maker's shares down more than 8 percent.
Under Armour, a smaller challenger to Nike Inc (NKE.N),
said sales gains in its apparel and footwear business led to
third-quarter net income of $26.2 million, or 52 cents per
share, up from $25.7 million, or 51 cents per share, a year
Analysts on average had been expecting earnings of 44 cents
per share, according to Thomson Reuters I/B/E/S.
The Baltimore-based company said it now expected 2009
earnings of 85 cents to 87 cents per share, compared with a
prior forecast of 80 cents to 82 cents.
Given its strong third-quarter results, the full-year
forecast implies fourth-quarter earnings of 23 cents to 25
cents per share, said Stifel Nicolaus analyst Thomas Shaw. That
is below the 28 cent-per-share average estimate of analysts
polled by Thomson Reuters I/B/E/S.
Under Armour also said it expects 2009 revenue of $830
million to $835 million, up from its prior forecast for revenue
of $810 million.
For 2010, the company said it expected earnings per share
and revenue to grow a high single-digit to low double-digit
percentage rate. That forecast assumes no sales growth in Under
Armour's smaller footwear business.
STRONG THIRD QUARTER, CAUTIOUS HOLIDAY VIEW
Under Armour revenue rose 16 percent to $269.5 million in
the third quarter, beating the analysts' average estimate of
Clothing revenue rose 7.1 percent to $215.4 million, driven
by increases in the company's men's, women's and youth apparel
businesses. Revenue from footwear, a growing category, jumped
to $33 million from $13.1 million a year earlier.
Across the retail sector, consumers are showing a renewed
interest in shopping, said William Blair analyst Sharon
Zackfia. She cited strong sales reports from Lululemon
Athletica LLL.TO (LULU.O) and J Crew Group Inc JCG.N, in
addition to Under Armour. [ID:nN26203223] [ID:nN22137286]
"The vast majority of retailers are showing improving
trends -- against easier comparisons -- but it's encouraging,"
Still Zackfia remains cautious in her outlook for the
holiday season, saying that it was still too early to tell how
the industry's most important quarter would play out.
"I like what I'm hearing right now, but I don't want to go
crazy with September and October. I feel more confidence, but
it always comes down to the wire with the holidays."
Under Armour's third-quarter gross margin contracted by 1.3
percentage points. Its selling, general and administrative
expenses were up 21 percent due to higher personnel costs and
the expansion of its outlet stores.
Under Armour forecast selling, general and administrative
costs to grow at a mid-teen percentage rate from 2008. It
earlier forecast a low-teen percentage rate increase.
Under Armour shares were down $2.76, or 8.3 percent, at
$30.33 on the New York Stock Exchange.
(Editing by Derek Caney and Lisa Von Ahn)