Under Armour (UAA 15.88, +1.65) has spiked 11.6% in pre-market as the company's revenue beat outweighs cautions guidance.
The athletic apparel manufacturer reported breakeven earnings for the fourth quarter, which was expected. The company's revenue grew 4.6% year-over-year to $1.37 billion, which was ahead of market expectations.
Sales to wholesale customers declined 1.0% to $733 million while direct-to-consumer revenue increased 11.0% to $575 million. Direct-to-consumer revenue accounted for 42.0% of global sales during the fourth quarter.
Gross margin weakened to 43.2%, representing a 150-basis point drop.
Looking at the segment breakdown, footwear revenue jumped 9.5% year-over-year to $246.20 million. Accessories revenue increased 6.1% to $110.67 million while apparel revenue grew 2.5% to $951.67 million. Licensing revenue rose 10.1% to $32.94 million while Connected Fitness revenue jumped 30.8% to $23.89 million.
The company recorded solid international sales growth while North America revenue fell 4.5% to $1.02 billion. Europe, Middle East, and Africa revenue spiked 45.5% to $135.31 million, Asia-Pacific revenue grew 55.7% to $123.94 million, and Latin America revenue grew 36.0% to $57.98 million.
Looking ahead, Under Armour expects that earnings for fiscal year 2018 will be between $0.14 and $0.19 per share, which is shy of expectations. The company expects a revenue growth rate in the low single-digits. This is expected to include a decline in North American sales and a significant increase in international sales. Gross margin is expected to improve to 45.5% due to lower planned promotional activity, product costs, and channel mix.