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Under Armour shares soared in Tuesday’s premarket after the company reported sales that topped analysts’ expectations, fueled largely by growth outside of North America.
Premarket trading pointed to a 10 percent rise at the opening of Tuesday’s session. At one point, the gain was 14 percent.
Under Armour said total revenue in the fourth quarter climbed 5 percent to $1.37 billion. Analysts were expecting $1.31 billion, according to a Thomson Reuters survey. Sales in international markets climbed 47 percent, representing 23 percent of total sales.
The company reported a net loss of $88 million, or 20 cents a share, compared with net income of $103 million, or 23 cents per share, a year ago. Excluding one-time items, Under Armour earned 0 cents in the fourth quarter, matching analysts’ estimates. The company incurred a one-time charge of $39 million in the quarter due to new U.S. tax legislation.
“2017 was a catalyst for us to begin strategically transforming Under Armour into an operationally excellent company,” CEO Kevin Plank said in a statement. “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.”
Late last year, Under Armour reported third-quarter sales that fell short of analysts’ expectations as the company booked an $85 million charge for restructuring efforts. It has since trimmed about 2 percent of its global workforce and has considered exiting smaller categories, such as fishing.
The Baltimore-based retailer has suffered in North America, where demand for its apparel merchandise hasn’t been as strong. That’s against a backdrop of brands such as Adidas, Nike, Lululemon and up-starts like Outdoor Voices stealing market share.
In the fourth quarter, though, which includes the holiday season, Under Armour managed to sell more apparel, footwear and accessories. Revenue in those divisions climbed, 2.5, 9.5 and 6.1 percent, respectively. The company said its strongest businesses include still men’s training and running shoes.
Plank has said one area where the company is still focused on growing is selling directly to consumers internationally. The company recently announced a handful of new hires to help meet those goals.
North American sales in the fourth quarter fell 4 percent, but direct-to-consumer revenue climbed 11 percent overall. Under Armour continues to build out its website to meet these new growth targets, as its wholesale revenues decline.
Looking to fiscal 2018, Under Armour said it anticipates sales to grow at a low-single-digit percentage rate, which incorporates a mid-single-digit decline in North American sales and growth internationally of more than 25 percent.
The company is expecting to incur additional restructuring charges of $110 million to $130 million this year because of restructuring, including terminating leases and closing some facilities.
As of Monday’s market close, Under Armour shares are down about 34 percent from a year ago.