* Q1 EPS $0.14 vs Wall Street view $0.10
* Q1 net revenues up 14.7 pct to $229.4 mln
* Sees FY 2010 EPS $1.05-$1.07 vs Street view $1.05
* Plans to open 16-18 more Factory House outlet stores
* Shares down 238.2 pct
(Adds executive, analyst comments, byline, updates share
By Phil Wahba
NEW YORK, April 27 Under Armour Inc (UA.N)
reported better-than-expected quarterly earnings and raised its
full-year forecast on Tuesday, but investors had hoped for more
growth from the sports apparel maker this year and its shares
The company, a much smaller but fast-growing rival of Nike
Inc (NKE.N), makes products touted for their moisture-wicking
fabrics. It has made efforts to reach more women shoppers and
cater to a wider swath of athletes, a strategy it says has paid
Sales of its athletic clothes, which made up three-quarters
of overall revenue, rose 31 percent during the first quarter.
Under Armour also benefited from a 73 percent jump in its
direct business, which includes sales at its Factory House
outlet stores and on its website. However footwear sales
lagged, dropping 24.4 percent.
First-quarter net profit was $7.2 million, or 14 cents per
share, up 80.1 percent from $4 million, or 8 cents per share, a
Analysts on average had been expecting earnings of 10 cents
per share, according to Thomson Reuters I/B/E/S.
The larger online sales and better margins on its clothing
lines lifted Under Armour's gross margin rate by 2.3 percentage
points to 46.9 percent.
Net revenue rose 14.7 percent to $229.4 million. Analysts
had expected $214.5 million.
The company raised its profit outlook for its full fiscal
year to a range of $1.05 per share to $1.07 per share. Analysts
had forecast $1.05 per share.
Thomas Weisel Partners analyst Jim Duffy said the updated
forecast, which only reflects the faster growth rate of the
first quarter, "is likely to be viewed as a disappointment"
considering improving consumer spending.
Under Armour shares were up more than 28 percent since the
start of the year on hopes an economic recovery would fuel
spending on its merchandise. The stock fell 99 cents or 2.8
percent to $34.94 in afternoon trading, off a year-high of
$36.22 hit on Monday.
REACHING MORE WOMEN
In a statement, Chief Executive Kevin Plank said the
results reflected Under Armour's broadening appeal to "new
athletes across sports, gender and geographies."
Plank said on a conference call he could see sales to women
eventually outpacing sales of men's items.
Under Armour plans to push the expansion of its Factory
House chain and open 16 to 18 locations this year to benefit
from higher profit margins in retail. It operated 35 Factory
House locations at the end of 2009.
"Factory outlets grow their direct sales -- it's clearly a
channel their customers like -- it allows the company to offer
a full assortment of product and present in a cohesive way,"
said Jefferies analyst Taposh Bari.
Wedbush Securities analyst Camilo Lyon said Under Armor's
push to have its products sold at department stores such as
Nordstrom Inc (JWN.N) is also helping it reach new shoppers.
(Reporting by Phil Wahba; additional reporting by Alexandria
Sage; Editing by Gerald E. McCormick, Dave Zimmerman)