Under Armour share price soars as Steph Curry’s basketball shoes helps revenue beat expectations
Under Armour jumped more than 18 per cent in morning trading on the New York Stock Exchange after its fourth-quarter results destroyed expectations.
The figures
Full-year net revenues increased 31 per cent to $3.96bn (£2.76bn) – beating the sportswear brand's outlook of $3.91bn.
The biggest performance in the company's portfolio was found in its footwear division where the success of a signature line of basketball shoes from NBA superstar Steph Curry scored net revenues of $678m – a 57 per cent increase on $431m a year ago.
Net income also shot up 21 per cent from $88m to $106m.
In the fourth quarter, earnings per share came in at $0.48 – beating analysts' expectations of $0.46 after a slow slump in the company's share price since it hit an all-time high of $103 per share last year.
Looking ahead, Under Armour said it anticipates a 25 per cent growth in revenue to $4.95bn in 2016. Some of its sponsored athletes certainly have much to look forward to and should continue building awareness of the brand: NFL quarterback Cam Newton will play in next week's Superbowl, golfer Jordan Spieth has unveiled his first signature line of Under Armour gear and reigning NBA MVP Curry remains the best player in the league this season.
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Why it's interesting
Under Armour celebrates its 20th anniversary as a company in 2016 and will reflect not only on its assault on Nike and Adidas' market share in sportswear apparel, but also on its successful diversification into footwear.
Perhaps more intriguing for investors however, will be the company's ambitious attempts to establish itself as a wearable tech front-runner. Earlier this month the company unveiled a portfolio of connected fitness products to add to its already existing platforms MyFitnessPal, Endomondo and MapMyFitness.
Chief executive Kevin Plank revealed the scale of the company's ambition in the latest earnings release, saying: "In Connected Fitness, we ended 2015 with nearly 160m unique registered users across our platform that logged nearly 8bn foods and 2bn activities during the year…Now with a more complete picture of our consumer, we are establishing our data-driven math house that will provide us with real-time information to make better decisions and build even better products. More importantly, it will provide deeper insights, recommendations, and personalized content to empower consumers to live healthier lives."
Steph Curry is one of Under Armour's most renowned sponsored athletes (Source: Getty)
What Under Armour chief exec Kevin Plank said:
We continued to diversify our product offering and geographic reach, driving significant market share gains in key strategic areas like basketball footwear.
We are confident in our ability to build upon this tremendous momentum, reinforcing our belief that we are just getting started in becoming the next great global brand.
In short
As it heads into its 20th year as a company, Under Armour is expected to cement its position behind Nike in the US market thanks to a strong roster of sponsored athletes and its so far successful ventures into new markets and products.