Under Armour shares initially jumped more than 5 percent on Tuesday after the sneaker maker reported better-than-expected fourth-quarter earnings and revenue, boosted by apparel sales and growth overseas.
The company earned 9 cents per share on an adjusted basis, topping expectations of 4 cents, based on a poll by Refinitiv.
Sales during the quarter rose 1.5 percent to $1.39 billion, again ahead of expectations for $1.38 billion.
In the U.S., Under Armour said sales fell 6 percent during the fourth quarter to $965 million, while international sales climbed 28 percent on a currency neutral basis to $395 million and now account for 28 percent of total revenue.
It said apparel sales were up 2 percent, fueled by its training business. Footwear sales were down 4 percent, as Under Armour said it sold less shoes in discount stores during the holiday period. Accessories sales declined 2 percent.
The retailer didn’t make any changes to its outlook for 2019, which it laid out in December.
It’s still calling for sales to be up 3 to 4 percent in 2019, with results “relatively flat” in North America. Wall Street was largely disappointed when Under Armour announced these targets, as they imply the focus this year will still be on investing, and that more meaningful growth won’t come until 2020 or later.
In the U.S., Under Armour has been grappling with how to grow sales amid a landscape flush with competition from Adidas, Nike and Lululemon. Part of its efforts to turn things around have included cutting staff, finding ways to trim excess inventory piling up in warehouses and promising a bigger focus on new sneakers and women’s items.
Under Armour said inventory levels dropped 12 percent during the fourth quarter.
“Overall, Under Armour continues to make progress against its strategic initiatives, improving category management, shortening product lead times to 16 months from 21 … and expanding footwear franchises,” Telsey Advisory Group analyst Cristina Fernandez said in a research note ahead of Tuesday’s earnings report.
Some of the retailer’s best-selling footwear brands of late include Project Rock, Curry 6 and its HOVR sneakers. Under Armour also recently announced it’s going to be spaceflight company Virgin Galactic’s “technical spacewear partner,” making custom spacesuits and shoes for astronauts.
Under Armour shares have climbed more than 50 percent from a year ago.