Under Armour's Q1 Beat Sends Stock Sharply Higher

Shares of Under Armour Inc UAA gained more than 10 percent early Thursday morning after the footwear, apparel and equipment maker reported a better than expected first quarter earnings report.

Expectations heading into the report were high after two consecutive earnings report that disappointed investors. Based on the stock's upwards movement it may be safe to assume investors are satisfied with the company's performance in the quarter and management's reiteration of its outlook moving forward.

Under Armour said it lost $0.01 per share in the first quarter on revenue of $1.117 billion; Analysts were expecting the company to lose $0.04 per share on revenue of $1.11 billion.

"Our first quarter results were in line with our expectations and we're off to a solid start in 2017," said Chairman and CEO Kevin Plank. "By proactively managing our growth to deliver superior innovative product, continuing to strengthen our connection with consumers and increasing our focus on operational excellence - we have great confidence in our ability to drive toward our full year targets."

Here are some highlights from the quarter:

• Wholesale revenue rose 4 percent from a year ago to $773 million.
• Direct-to-consumer revenue rose 13 percent to $302 million.
• North American revenue fell 1 percent due to "the absence of business lost to bankruptcies in 2016."
• International revenue represented 20 percent of total revenue and rose 52 percent, or 57 percent on a currency neutral basis.
• Gross margin fell 70 basis points to 45.2 percent due to ongoing efforts to manage inventory levels.
• Operating income was $8 million and the company recorded a $2 million net loss.

No Change To Guidance

Under Armour reaffirmed its 2017 guidance, as follows:

• Net revenue to rise 11 to 12 percent and hit nearly $5.4 billion.
• Gross margin to be "slightly down" from 2016's level of 46.4 percent.
• Operating income to be around $320 million.

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