Under Armour Shares Increase Despite a Decline in US Sales

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Today, the shares in Under Armour, a  sportswear brand, spiked after international sales helped the company to record numbers that have surpassed forecasts.

Revenue increased by five percent to $1.4bn (£1bn) during the fourth quarter of last year. This comprised a decline in wholesale revenue and a drop in North America.

However, strong growth of 45 percent in the Middle East, Europe, and Africa region, a 56 percent Asia-Pacific jump, and a 36 percent increase in Latin America helped to offset this.

Over the year, revenue was up by three percent to $5bn. Gross margin dropped by 140 basis points because of price cuts.

Under Armour was established in the 1990s. It has emerged as a major challenger to the monopoly of the likes of Adidas and Nike on the sports apparel market.

However, a series of disappointing results had recently consumed investor confidence, with the stocks of the company heavily shorted.

Today, the more positive results surpassed the expectations of analysts, sending the shares of the firm up by more than 16 percent.

It arrives amid major restructuring plans for the company, which cost $124m in 2017.

“After years of rapid growth and building a globally recognised brand, the dynamic landscape of 2017 was a catalyst for us to begin strategically transforming Under Armour into an operationally excellent company,” stated Kevin Plank, the chairman and chief executive of Under Armour.

“A year into this journey, our fourth quarter and full year results demonstrate that the tough decisions we’re making are generating the stability necessary to create a more consistent and predictable path to deliver long-term value to our shareholders.”