Under Armour's stock jumped Thursday after the Baltimore-based sports apparel brand beat analysts' expectations, reporting growth abroad and strong footwear sales in the second quarter.
Its shares rose $6.58 each to close at $95.95 in Thursday trading.
In the April-to-June period, Under Armour's sales grew 29 percent to $784 million, from $610 million in 2014's second quarter. International revenue leaped 93 percent from last year, while footwear sales rose 40 percent, driven by the top-selling basketball shoe named for Golden State Warriors player Stephen Curry.
A report by Morgan Stanley analysts said the footwear and international sales numbers suggest that Under Armour's chances of realizing its ambition to become a top global brand are "improving and increasingly probable."
"Under Armour remains one of retail's best growth stories," it said.
Under Armour executives also said they expected revenue to grow about 25 percent for the year, reaching $3.84 billion, higher than previous predictions. They also said they expect annual operating income between $405 and $408 million at the high end of earlier projections.
The company also plans to increase marketing to capitalize on recent success by Curry and other Under Armour-endorsing athletes such as ballerina Misty Copeland and golfer Jordan Spieth.
"To us, this moment provides a great chance to build a more meaningful connection with our consumer through the power of these transcendent athletes," CEO Kevin Plank said. "That connection can be deeper and more powerful for our brand than any short term spike in our revenues or our earnings."
Even as sales boomed, profits in the second quarter dropped to $15 million, down from $18 million a year earlier. Per-share earnings slipped a penny to seven cents in the comparable periods — still above analysts' expectations of five cents.
The company said its profitability suffered as foreign exchange rates and shipping costs pinched its margins. The firm also spent more on its growing fitness software business and the opening of stores during the quarter.
Under Armour has investors' confidence that spending now will pay off later, said Sam Poser, an analyst with Sterne Agee. Given the strong sales, the money-losing app side of the business is just "icing" on a rich cake, he said.
"They have a very good team, they have a lot of vision and so from that sense, I'll trust them," Poser said of the Connected Fitness apps. "There's so much there right now, that's the icing at best."
More information about how Under Armour plans to use its fitness software is expected at the firm's investor day in September. The company said it has more than 140 million people registered to its four apps — two of which it acquired this year — and is signing up new users at a rate of 100,000 a day.
"We see this as just a massive white space." Plank said. "The value for us [is] not going to be in the equipment side of it, but the value for us is going to be in the community and we feel like we've really locked that up."
Plank spoke from Munich, where he was opening a new office. The firm now has 17 regional offices outside the United States.
About 50 percent of international sales come from Europe, with the rest split between Asia and Latin America, said Brad Dickerson, the firm's chief financial and chief operating officer.
Poser said the firm has been careful to protect its brand as it expands internationally.
"The main thing with these guys is that the brand is absolutely sacrosanct," he said. "They're making sure that as they grow, they're doing it in a very methodological way. That doesn't mean they're slow. … They're still very aggressive and they still want to conquer the world."