Consumers aren’t giving up their sweats just yet — and Under Armour is flying high as a result.
Shares of the athletic apparel company soared more than 16 percent to more than $22 on Tuesday after it raised its guidance for the year based on brisk sales of its sweat-wicking clothing and sneakers.
What’s more, the company said its overseas factories are humming and have kept Under Armour’s products flowing for the crucial holiday season.
“Nearly all factories that Under Armour does business with, including those in Vietnam, are open,” finance chief David Bergman said on Tuesday, assuaging investors’ fears about supply chain challenges that are wreaking havoc on the retail sector.
Apparel sales were up 14.2 percent to $1 billion in the quarter ended Sept. 30 while footwear sales were up 10.4 percent to $329 million. Total revenue in North America — its biggest market — rose 8 percent to $1.55 billion from $1.43 billion a year earlier.
The Baltimore-based company raised its sales guidance for the year to 25 percent up from the low twenties and said earnings would also be greater or 74 cents compared with its prior estimate of 50 cents to 52 cents.
What’s more consumers are willing to pay full price for Under Armour gear, noted BMO analyst Simeon Siegel.
“We believe Under Armour remains one of the few that successfully raised its pricing prower,” Siegel wrote in a research note.
Under Armour, like other athletic gear companies, including Nike and Adidas, has benefitted from consumers who have been working from home and are wearing more comfortable clothing, industry experts say.
There has been a “fundamental shift in consumer behavior,” as more people focus on their health, a trend that has “staying power” and that has lifted Under Armour, wrote J.P. Morgan analyst Matthew Boss in a research note.