Under Armour Posts Smaller-Than-Expected Loss, Shares Surge
Sportswear maker Under Armour posted a smaller-than-expected quarterly loss as operating income from its Asia Pacific business rose 13.2 percent, making the region the company's biggest profit generator in the latest quarter.
Shares of Under Armour, which is known for its line of Stephen Curry basketball gear and Bandit running shoes, jumped nearly 9 percent before the bell on Thursday.
The company, which reported quick-paced growth until a few quarters ago, has been battling intense competition from Germany's Adidas AG.
Making matters worse, athletic leisure wear is showing signs of aging amid possible shopper fatigue with the now decade-old fashion category.
To win back market share in the United States, both Under Armour and bigger rival Nike Inc have resorted to higher promotions and discounts.
Under Armour's operating income from North America slumped nearly 91 percent, while income from EMEA fell 44 percent, in the first quarter ended March 31.
The company reported a net loss of $2.3 million, or 1 cent per share. Analysts on average had expected a loss of 4 cents per share, according to Thomson Reuters I/B/E/S.
"Under Armour beat what had become an incredibly negative investor bar into this earnings with a high short interest," Instinet analyst Simeon Siegel told Reuters.
Operating income from Asia-Pacific rose to $19.6 million.
Total revenue rose 6.6 percent to $1.12 billion, inching past Wall Street estimates of $1.11 billion.
(Reporting by Jessica Kuruthukulangara in Bengaluru; Editing by Sriraj Kalluvila and Sayantani Ghosh)