Under Armour Inc. continues to defy the odds.
Following a substantial decline in its share price, over the past three months, and predictions of a lackluster fourth quarter, the Baltimore-based footwear-and-apparel brand’s stock is soaring Thursday after it upstaged Wall Street with a solid Q4 beat.
At press time, Under Armour’s share price had advanced more than 17 percent after the firm said its revenues climbed 31 percent, year-over-year, to $1.17 billion — well above The Street’s forecast for sales totaling $1.12 billion. Despite an overall tough 2015 holiday for most footwear and apparel brands due mostly to an unseasonably warmer start to winter, the firm also pulled off fourth quarter diluted earnings-per-share of 48 cents, a 19 percent improvement year-over-year and above market watchers’ forecast for diluted EPS of 46 cents.
Under Armour CEO Kevin Plank, who highlighted that the brand celebrates its 20th anniversary this year, shunned naysayers during the Q4 conference call.
“Each year around this time, weather inevitably plays [a part in the] conversation, and each year we answer those who doubt us with extremely strong growth numbers in the fourth quarter,” Plank said. “Whether it’s 72 degrees on the East Coast this past Christmas — [which] it was — did it effect in our business in the way some thought it would? No, it did not. … Our business is more diversified than it has ever been, we do not let weather play a decisive role in dictating our success.”
The brand’s net income also grew 21 percent in the quarter, to $106 million. Footwear, once again, was the major driver. Shoe sales grew 95 percent, to $167 million, “primarily reflecting the success of the Curry signature basketball line and expanded running offerings,” according to the company.
“Footwear — and to be clear, premium footwear — continues to be an accelerator to our top line and a huge part of our growth story [is set on] building a $1 billion footwear brand,” Plank said.
International sales were also a bright spot for Under Armour in the quarter — climbing 70 percent year-over-year, or 85 percent on a currency-neutral basis. Direct-to-consumer revenues, which represented 36 percent of total net revenues in Q4, grew 25 percent year-over-year.
Under Armour maintained its FY16 revenue growth guidance of 25 percent, but upped the dollar amount from $4.89 billion to $4.95 billion. FY16 operating income guidance was increased to $503 million from $502 million, representing growth of 23 percent over 2015.
Inventory was up 46 percent at the end of the fourth quarter.