UA Rush by Under Armour is launching on April 11.

Under Armour Inc.’s turnaround plan is starting to pay off.

After a rough patch, the Baltimore-based ath-leisure brand has been attempting to catch up with its competitors and move away from discounts and its newly released first-quarter results showed that progress is continuing to be made, boosting its share price to the tune of 3.5 percent to $22.82.

Net income came in at $22 million, or 5 cents per share, compared with a loss of $30.2 million, or 7 cents per share, a year earlier and beating analysts’ predictions that it would break even, according to Factset.

At the same time, net revenue rose 2 percent to $1.2 billion, just surpassing Wall Street expectations for $1.18 billion. Within that, apparel revenue was up 1 percent to $775 million and footwear was 8 percent higher at $293 million.

On a regional basis, however, it was a mixed bag, with international business up 12 percent to $328 million, but North America revenue decreasing 3 percent to $843 million. In comparison, Nike Inc., its main rival alongside Adidas AG, enjoyed a 7 percent increase in North America revenue in its latest quarter.

The weakness in North America sales didn’t seem to worry analysts, though, with Randal J. Konik, an analyst at Jefferies, writing in a note to clients that the region is planned flat for the year. This, he believes, implies sales in the region should accelerate and turn positive.

“The brand is strong and still in the early innings of global growth. The top line is recovering and margins are improving, suggesting upward EPS revisions ahead. With valuation compressed and overly negative sentiment, we see significant upside potential,” he added.

Looking ahead, Under Armour expects revenue to be up about 3 percent to 4 percent for the fiscal year as a whole, reflecting relatively flat results for North America and a low-double-digit percentage rate increase in the international business.

Earnings per share, meanwhile, should be in the region of between 33 cents and 34 cents, higher than the previously expected 31 cents to 33 cents.

“Our first-quarter results demonstrate our unwavering commitment to protecting and growing our premium performance athletic brand through a disciplined go-to-market process that delivers innovative products and experiences to make athletes better,” said Under Armour chairman and chief executive officer Kevin Plank.

But, if analysts at Cowen are right, it can go even better. They believe these estimates are “too conservative” on the back of improving innovation in footwear and apparel, alongside better full-price selling.

The financials follow a number of staff changes as Under Armour looks to improve not only its profits, but also its culture. Notable recent movements include a new design chief to oversee all product, the departure of its North America head and the creation of a chief people and culture officer.

The latter is thought to be in response to the roiling controversy stemming from revelations that, until recently, Under Armour executives were permitted to expense strip club visits.



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