Under Armour raises sales forecast again, stock at new high
By Yashaswini Swamynathan
(Reuters) - Under Armour Inc, the No.2 U.S. sportswear maker, raised its full-year forecast for the second time in three months, strengthening investors' confidence in the company whose valuation is already lofty.
Shares of the company jumped as much as 9 percent to a record $97.37 on Thursday morning, after the company also reported better-than-expected quarterly sales.
Under Armour has been quick to cash in on the new trend of "athleisure", a mash up of athletic and casual clothing seen even in formal settings like offices.
"The trend shows no signs of slowing down," research firm Conlumino's CEO Neil Saunders said.
The success of sports stars, such as golfer Jordan Spieth and ballerina Misty Copeland, whose signature lines Under Armour sells has helped its results race past estimates in the past few quarters.
Under Armour, founded in 1996, has moved from designing sweat-absorbing T-shirts to acquiring companies that make wearable technology and connected clothing such as Endomondo and MyFitnessPal in February.
The acquisitions have increased debt and eaten into profits, But have also created a new income stream at a modest cost to pay "for a development that could transform the company's long term earning potential," Saunders said.
Under Armour shares traded at 69.81 times forward earnings as of Wednesday — more than thrice the industry median of 26.76, according to Thomson Reuters data. Continued...