(Reuters) - Sportswear maker Under Armour Inc (UA.N) (UAA.N) raised its revenue forecast for the year on the back of higher demand for its athletic wear overseas and a turnaround in its U.S. sales, sending its shares up 8 percent on Thursday.
The company, known for its Stephen Curry 5 basketball shoes, has been spending more to open stores and improve its online offerings in international markets, including China, to grab market share from sneaker giants Nike Inc (NKE.N) and Adidas AG (ADSGn.DE).
That helped fuel a more than 30 percent sales growth in both Europe and Asia in the second quarter ended June 30. North American sales also inched up 1.6 percent, breaking a run of declines dating back to several quarters.
For 2018, the company expects sales growth of 3 percent to 4 percent, up from its previous forecast of low single-digit growth.
However, the company said costs related to reducing its U.S. inventory by selling to off-price stores would weigh on margins for the rest of the year. It now expects 2018 gross margins to be flat to down slightly from a year earlier.
“The question ultimately will be how large can they grow their revenue and at what profitability,” Nomura/Instinet analyst Simeon Siegel said.
The ramp up in spending, however, led the company to report a bigger quarterly loss.
Net loss widened to $95.5 million, or 21 cents per share, as costs rose 10 percent.
Excluding certain items, the Baltimore-based company lost 8 cents per share, in line with analysts’ estimates, according to Thomson Reuters I/B/E/S.
Net revenue rose nearly 8 percent to $1.17 billion, beating analysts’ average estimate of $1.15 billion.
Reporting by Nivedita Balu in Bengaluru; Writing by Sweta Singh; Editing by Patrick Graham and Anil D'Silva