Under Armour, Inc. (UAA – Free Report) reported mixed quarterly numbers in fourth-quarter 2017 wherein earnings came in below the Zacks Consensus Estimate but revenues surpassed the same. The company reported break-even adjusted earnings, missing the consensus mark of 1 cent.

Despite the earnings miss, the company’s shares are up nearly 12% during the pre-market trading session. The uptick can be attributed to better-than-expected top-line performance. In the past three months, the company’s shares have surged 17.1% compared with the industry’s gain of 14.6%.

Following robust demand in Europe, the Middle East and Africa (EMEA), Asia-Pacific and Latin America the company’s top line increased 4.6% to $1,365.4 million, beating the consensus estimate of $1,308 million. Currently, the company is keen on expanding footprint and enhancing brand recognition to get an edge. Further, the deal with rising athletes lends Under Armour a suitable platform to showcase its brands.

Quarterly Results in Detail

Apparel sales rose 2.5% to $951.7 million while Footwear net revenues increased 9.5% to $246.2 million in the quarter under review. Net revenues in the Accessories category were up 6.1% to $110.7 million while Licensing revenues rose 10.1% year over year to $32.9 million. Moreover, the company’s Connected Fitness segment reported year-over-year increase of 30.8% to $23.9 million.

North America net revenues dropped 4.5% to $1,024.2 million while the same from EMEA, Asia-pacific and Latin America jumped 45.5%, 55.7% and 36% to $135.3 million, $123.9 million and $58 million, respectively.
Also, gross margin contracted 140 basis points to 45% due to aggressive inventory management that overshadowed favorable channel mix.

Other Financial Details

Under Armour ended the quarter with cash and cash equivalents of $312.5 million, up 24.8% from the prior-year period. Total long-term debt was $765 million compared with $790.4 million in the prior-year period. Shareholders’ equity at the end of the quarter was $2,018.6 million.

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