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Under Armour Earnings Beat Not Enough To Keep Stock In The Green

This article is more than 9 years old.

Under Armour knocked out both top and bottom line beats Thursday morning but the gains were not enough to keep the stock in the positive territory.

The athletic apparel company reported $937.9 million in third quarter revenue, up 30% from the same period last year. Net income came in at $89 million, up 22%, and earnings per share came in at 40 cents. All three metrics came in slightly ahead of Wall Street's expectations, with per share earnings beating by a penny. Nevertheless   Under Armour opened trading down  around 6% near $62 a share before reversing much of the loss to over $65 a share, or down less than 1%.

The move lower came as a surprise to some. In a note on the report Citi analyst Kate McShane wrote, "Although the bar was high going into the print, we think UA shares should move higher on today’s beat and yet another guidance raise (which will likely prove conservative again), as very strong momentum is expected to close out the year."

Under Armour raised fiscal 2014 guidance for the fourth time Thursday. The company now expects revenue around $3.03, up from the earlier range top of $3 billion. Under Armour also raised its operating income forecast to $348 million, from a previous high estimate of $345 million. This would represent 31% growth over 2013.

"Our plans of crossing $3 billion in net revenues and achieving 30% growth this year represent significant milestones for the Brand, but we believe we are just getting started," said billionaire Under Armour CEO Kevin Plank in a statement on the results. He pointed to 50% growth in Under Armour's footwear division and 94% international growth. Plank concluded, "We are proud of what we have built and continue to see ourselves as a much larger brand than the $3 billion in revenues we are projecting for 2014."

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