Updated from 9:24 a.m. EST to reflect analyst comments in 8th paragraph.
NEW YORK (TheStreet) -- At least this cold snap is benefiting someone. Shares of Under Armour (UA) exploded after the athletic apparel retailer reported fourth-quarter results that far exceeded expectations driven by an expanded fleece portfolio and new ColdGear Infrared products.
Before market open on Thursday, shares had added 11.9% to $95.38. If momentum can be sustained through Thursday's session, this will mark the company's highest-ever trading level since floating in 2005.
While retailers struggled with an aggressively promotional holiday season, Under Armour managed to easily boost sales through direct-to-consumer avenues, such as factory stores and e-commerce. The segment saw a 36% year-over-year increase in sales and now accounts for 39% of total revenue.The Baltimore-based business recorded fourth-quarter revenue 35% higher than a year earlier to $683 million, while per-share earnings jumped 27% to 59 cents. Analysts polled by Thomson Reuters had expected earnings of 53 cents a share on $620 million in revenue. For the December-ended fiscal year, the company recorded earnings of $1.50 a share, 24% higher than a year earlier. Revenue of $2.33 billion, of which apparel sales contributed $1.76 billion, soared 27% from 2012. "By any measure, 2013 was a banner year for the UA Brand. We surpassed $2 billion in net revenues for the year, which culminated with our 15th straight quarter of at least 20% total growth," said CEO Kevin Plank in a statement. Under Armour raised its 2014 revenue outlook to a range of $2.84 billion to $2.87 billion, 22% to 23% higher than 2013 results, and handily beating analyst consensus of $2.77 billion. Bryan Ashenberg, analyst for premium service Breakout Stocks, noted the impressive earnings win is indicative of a smart company set to move higher. "The company continues to position itself to benefit from the tailwinds of cold weather and upcoming international sporting events, while also carving out a bigger presence in clothing for women and young people," he wrote in a report Thursday morning. Under Armour also remains one of Jim Cramer's favorite shares, a "stealth technology" stock set for a win. "This Baltimore-based apparel company is rolling out new products literally quarterly, with properties that keep you warm or monitor health in ways that you couldn't dream of just a few years ago. It is a factory of innovation," Cramer writes in his latest book Get Rich Carefully. TheStreet Ratings team rates UNDER ARMOUR INC as a Buy with a ratings score of B. The team has this to say about its recommendation: "We rate UNDER ARMOUR INC (UA) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
- You can view the full analysis from the report here: UA Ratings Report
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