UPDATE 4-Under Armour profit tops estimates; outlook raised

* Q3 EPS $0.68 vs Street view $0.60

* Sales up 22 pct to $328.6 mln vs Street view $322.4 mln

* Raises 2010 EPS, sales outlook

* Provides initial 2011 forecast

* Shares off 2.8 pct after strong run
(Adds details, updates stock action)

By Ben Klayman

DETROIT, Oct 26 (BestGrowthStock) – Sportswear maker Under Armour
Inc (UA.N: ) posted a higher-than-expected quarterly profit and
boosted its full-year earnings forecast, but some investors
sought an even stronger performance.

Shares of the company, which have gained 40 percent since
late August, slipped 2.8 percent in midday trading.

“Given the recent run in the stock, expectations have been
built up pretty high for a blowout quarter. This was a good
quarter, but I don’t know if I would classify it as a blowout,”
said Wedbush Securities analyst Camilo Lyon, who has a
“neutral” rating on the stock.

Lyon added that Under Armour’s apparel revenue was below
his estimate and gross margins of 50.9 percent were weaker than
the 51.5 percent the Street had expected.

Under Armour, a smaller but fast-growing rival of Nike Inc
(NKE.N: ), makes products touted for pulling sweat away from the
body. It has made efforts to reach more women shoppers and
cater to a wider swath of athletes.

Last month, Nike reported stronger-than-expected orders and
quarterly profit as consumer demand remained resilient in its
key markets, suggesting a solid holiday season.
[ID:nN23213576]

On Tuesday, German sporting goods company Puma (PUMG.DE: )
hiked its sales outlook and posted solid third-quarter results.
[ID:nLDE69P0DD]

Under Armour’s net income in the third quarter rose 33
percent to $34.9 million, or 68 cents a share, from $26.2
million, or 52 cents a share, in the year-earlier quarter.

Analysts polled by Thomson Reuters I/B/E/S had expected 60
cents a share. The company benefited from a lower-than-expected
tax rate that boosted results by about 5 cents a share, but
that rate will rise again in 2011.

Sales rose 22 percent to $328.6 million, topping the $322.4
million analysts had expected.

RAISES 2010 FORECAST

Under Armour raised its 2010 earnings forecast to a range
of $1.23 to $1.24 a share, from a previous $1.11 to $1.13 per
share. It sees sales of $1.03 billion to $1.035 billion, up
from its previous outlook of $990 million to $1.01 billion.

Under Armour expects 2011 revenue and earnings per share to
rise at the higher end of its long-term growth target of 20
percent to 25 percent.

Analysts were expecting $1.17 a share on sales of $1.02
billion in 2010, and $1.42 a share on sales of $1.21 billion in
2011.

In the third quarter, Under Armour’s apparel revenue rose
28 percent, driven by strong growth across the men’s, women’s
and youth segments, each of which saw sales rise at least 25
percent.

Direct-to-consumer revenue jumped 47 percent due to the
addition of new factory outlet stores, strong retail same-store
sales growth and higher demand on the Internet.

Footwear revenue fell about 20 percent. Under Armour had
previously said the business would decline in 2010 before
growing again next year. The company began selling on a limited
release its first basketball shoe over the weekend.

Under Armour Chief Executive Kevin Plank said the company
sees continued growth in its wholesale apparel and
direct-to-consumer businesses.

“We expect these businesses, along with bringing our
licensed hats and bags business in-house and an expected return
to growth in footwear, will continue to drive results through
2011,” he said.

Under Armour shares were down 2.8 percent, or $1.35, at
$46.56 in midday trading on the New York Stock Exchange. Since
hitting $34.20 on Aug. 27, shares had risen 40 percent through
Monday.
(Reporting by Ben Klayman in Detroit; Editing by Derek Caney,
John Wallace, Dave Zimmerman)

UPDATE 4-Under Armour profit tops estimates; outlook raised