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UPDATE 2-Under Armour bumps up sales forecast as footwear sales surge
July 24, 2014 / 12:55 PM / 3 years ago

UPDATE 2-Under Armour bumps up sales forecast as footwear sales surge

* Raises full-year sales forecast to $2.98-$30 bln

* 2nd-qtr revenue rises 34 pct to $609.7

* EPS $0.08 vs est $0.07

* Shares rise 16 pct to life-high (Adds details from conference call, analyst comment; updates shares)

By Ramkumar Iyer

July 24 (Reuters) - Sports apparel manufacturer and retailer Under Armour Inc raised its full-year sales forecast for the second time, citing “increased confidence” in its footwear and international businesses.

Shares of Under Armour, which sponsored the 2014 U.S. Olympic speed skating team, rose as much as 16 percent to $70.25, their highest ever.

The company said footwear sales rose by more than a third to $109.5 million in the second quarter ended June 30, accounting for 18 percent of total revenue.

The sales growth was driven by strong demand for its Highlight football cleats and SpeedForm Apollo running shoes, Under Armour said.

Jefferies analyst Randal Konik said sales grew across most businesses, especially newer categories such as youth, footwear, women’s and international.

“The diversification strategy is clearly working and we very are confident in UA’s ability to continue executing on its many growth initiatives,” Konik said, raising his price target on the company’s stock to $80 from $65.

Under Armour, known for performance sports clothing such as training t-shirts, warm-up jackets and swimwear, entered the footwear business in 2006 where it competes with Nike Inc and Adidas AG among others.

It supplies footwear to the NFL and kits to Engilsh Premier League club Tottenham Hotspur.

The company has also diversified into football and baseball cleats, running sneakers, fashionable women wear and fitness devices that display calorie counts and heart beats.

International sales surged 80 percent during the quarter to account for 8 percent of overall sales, the company said in its post-earnings call.

Under Armour’s clothing lines include the HeatGear range, which draws moisture away from the body to help the wearer stay cool and dry, and the ColdGear Infrared range, which uses a ceramic coating to retain body heat in cold weather.

The company’s apparel sales, which made up about 70 percent of total revenue, jumped 35.4 percent to $420 million in the quarter ended June, helped by a wider range of athletic wear.

Under Armour, which has beaten Wall Street profit forecasts for the past two years, raised its full-year sales forecast to $2.98 billion-$3.0 billion from $2.88 billion-$2.91 billion.

Analysts on average were expecting full-year sales of $2.91 billion, according to Thomson Reuters I/B/E/S.

Under Armour’s net profit rose marginally to $17.7 million, or 8 cents per share. Revenue rose 34 percent to $609.7 million.

Analysts on average had expected a profit of 7 cents per share on revenue of $574.4 million.

The Baltimore, Maryland-based company’s shares were up 14.7 percent at $69.51 at 12:22 pm ET. Up to Wednesday’s close, the stock had risen about 40 percent this year. (Reporting by Ramkumar Iyer and Shailaja Sharma in Bangalore; Editing by Saumyadeb Chakrabarty and Ted Kerr)

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