(Reuters) - Athletic gear maker Under Armour Inc (UA.N) warned that growth in 2014 might not be as strong as last year when the company benefited from the relaunch of its bags business and robust winter sales.
Under Armour’ shares traded down as much as 10 percent after the company’s downbeat comments. They had been up as much as 8 percent in premarket trade after the company reported a better-than-expected quarterly profit.
Chief Financial Officer Brad Dickerson said the 2014 first quarter benefited from comparisons with the year-ago period, when the company was pulling back on its bags business ahead of a relaunch in the second quarter.
“By the time you get (to) the second quarter we start to see tougher comps ...,” Dickerson said on a post-earnings call.
Benefits from the company’s supply chain improvements also began to flow in from the second quarter of 2013.
Under Armour’s revenue grew 23 percent in the second quarter of 2013, 26 percent in the third quarter and 35 percent in the fourth quarter.
“We’ll still see very robust results (but) maybe not quite as explosive as we saw in this quarter,” Cowen and Co analyst Faye Landes said.
Revenue jumped 36 percent to $641.6 million in the first quarter of 2014, ahead of analysts’ estimate of $598.8 million.
Landes said though the results were strong, investors are going to be very picky as the company trades at a very high valuation.
The stock trades at over 53 times its forward earnings, compared with an average multiple of about 21 for its peers, which include Nike Inc (NKE.N), Lululemon Athletica Inc (LULU.O) and Foot Locker Inc (FL.N).
Under Armour raised its revenue forecast to $2.88-$2.91 billion for the year, representing growth of 24-25 percent, from the $2.84-$2.87 billion it forecast in January.
Analysts on average are expecting revenue of $2.89 billion, according to Thomson Reuters I/B/E/S.
Under Armour’s revenue grew 27 percent in 2013.
The growing popularity of sportswear, particularly among women, and rising health consciousness have helped to push up demand for Under Armour’s athletic apparel.
Revenue from apparel jumped 33 percent to $459 million in the first quarter ended March, constituting about 72 percent of total revenue.
Under Armour’s clothing lines include HeatGear, which draws moisture away from the body to help the wearer stay cool and dry, and the ColdGear Infrared range that uses a ceramic coating to retain body heat in cold weather.
The company’s net income rose to $13.5 million, or 6 cents per share, in the quarter, from $7.8 million, or 4 cents per share, a year earlier.
Analysts on average had expected a profit of 4 cents per share.
The company’s shares were down 8 percent at $50.07 in afternoon trade. They have nearly doubled in the year to Wednesday’s close.
Reporting by Maria Ajit Thomas in Bangalore; Editing by Sriraj Kalluvila and Maju Samuel