Under Armour’s North American sales remained sluggish in the second quarter but overall revenue beat analysts’ estimates amid continued strong overseas demand.
The sneaker company reported Thursday that sales grew 8% to $1.17 billion for the April-to-June period, topping expectations for revenue of $1.15 billion. Under Armour’s net loss widened to $95.5 million, or 21 cents per share, from $12.3 million, or 3 cents per share, a year ago, but adjusted earnings of 8 cents were in line with estimates.
Revenue in North America rose only 2% but international revenue jumped 28%, reflecting a 31% increase in sales in Europe and a 34% jump in Asia.
On news of the earnings, Under Armour shares rose 2.8% to $21.65, having climbed as much as 9.5% in pre-market trading.
“Through the first half of 2018, we are making progress toward our transformation of running a more operationally excellent company while amplifying the power of the Under Armour brand,” CEO Kevin Plank said in a news release.
“The ongoing improvements in our structure, systems and go-to-market process across our global business better position us to drive a more consistent, predictable path to deliver for our consumers, customers and shareholders over the long-term,” he added.
As The Baltimore Sun reports, Under Armour enjoyed years of rapid growth but “stumbled toward the end of 2016 amid intense competition, closures of key retailers and changing consumer taste in the sports apparel category.”
In the U.S., athletic apparel and shoe companies have been hit by the bankruptcies of several sporting-goods retailers. Under Armour “has sought to combat those pressures by rolling out a new cushioning technology called HOVR, which has been a top seller, while it also aspires to reach more female customers by refreshing merchandise more frequently,” CNBC said.
“The athletic space in the U.S. is showing signs of improvement, as promotions normalize and the innovation pipeline strengthens, but Under Armour still faces several challenges,” Telsey Advisory Group analyst Cristina Fernandez said.
Under Armour CFO David Bergman said in an earnings call that the company has been using off-price retailers as a “channel … to clean up” its inventory position.