Under Armour Reports Growth In Q3, But Lowers Future Forecasts

Under Armour (UA) announced "continued growth in third-quarter sales and profit yesterday even as consumers cut back on most spending," according to Andrea Walker of the Baltimore SUN.  The company reported a Q3 net income of $25.7M, or $0.51 per share, ahead of analysts' expectations of $0.50 per share and up 28.5% over $20M ($0.40 a share) in the year-ago period. UA also reported $231.9M in revenue, up 24.1% over last year, and income from operations increased 37.5% to $46.5M. The company for Q3 "managed to maintain a gross profit margin of more than 50[%]," and the average selling price of UA product "grew in the 'single digits' during the quarter." Sales growth was "driven some by earlier orders placed by retailers." UA COO Wayne Marino: "We had an unbelievable third quarter. It's very recently that we started to see certain indicators drop." Stifel Nicolaus analyst Thomas Shaw: "People still want brands that resonate or brands that have a lot of momentum." But UA yesterday "lowered its forecasts for the rest of the year, saying orders for some of its products weren't as high as the company had expected." Some retailers "have even canceled orders." UA lowered its revenue estimate to a range of $750-760M, which assumes a growth rate of 24-26%, down from previous estimates of $765-775M. UA CFO Brad Dickerson said that the company "will look at ways to cut costs, such as reducing travel and having executives take smaller bonuses." Baltimore-based ad firm TBC Exec VP Howe Burch said of UA, "The brand is very strong, and they may be experiencing some effects of a down economy. But those are purely external factors that do not have anything to do with strength of the brand." UA shares yesterday climbed 26% to close at $22.88 (Baltimore SUN, 10/29). At presstime, UA shares were trading at $22.70, down 0.8% from yesterday's close (THE DAILY).