Shares of the sports apparel maker were climbing 23% in morning trading after the company reported third-quarter adjusted earnings of 25 cents a share, more than double the 12 cents that analysts were expecting.
"Under Armour continues to make progress on its multi-year restructuring, particularly with regards to inventory and cost reduction efforts. While some challenges still remain, the company is stabilizing and is better positioned for improvement in 2019," stated Moody's Apparel Analyst Mike Zuccaro. "Third quarter revenue grew 3% on a constant currency basis, as solid growth in international markets more than offset a decline in the North American region. The company made significant progress in inventory reduction, reducing levels by 1%, which is much faster than originally expected,"
The Baltimore-based company also reported revenue of $1.44 billion, ahead of analysts' estimates of $1.41 billion.
"Our third-quarter results demonstrate that our multi-year transformation is on track," said Under Armour Chairman and CEO Kevin Plank. "As we work through this chapter, we are staying sharply focused on our brand by connecting even more deeply with our consumers while delivering industry-leading, innovative products and premium experiences. Coupled with increasingly greater business discipline and resulting efficiencies, we continue to gain confidence in our long-term path and ability to deliver for our consumers, customers and shareholders."
The company, which has seen its stock increase 26% year to date, can thank a rise in international sales as the reason for the earnings and sales beats. The company saw revenue in North America fall 2% in the quarter to $1.1 billion but international sales rose 15% to $351 million.
Looking ahead, Under Armour said it expects to earn between 19 cents and 22 cents a share for the fourth quarter, up from its previous outlook between 16 cents and 19 cents.