Under Armour, Inc.
) hit a 52-week high of $121.43 yesterday on the announcement of
its two-for-one stock split, the second since this sports apparel
retailer went public in Nov 2005. The first stock split took
place in Jul 2012.
The company's board of directors hinted that the additional
shares in the form of a stock dividend will be distributed on Apr
14, 2014 to stakeholders of record as on Mar 28, 2014.
The principal aim behind the stock split is to make shares
affordable to small retail investors. The move involves altering
the number of shares outstanding and proportionally adjusting the
share price. This makes the shares appear more reasonably priced,
though the underlying value of the company remains constant.
In recent times, other companies have also announced stock
splits. These include
Westlake Chemical Corp.
), which announced a two-for-one stock split and
The Andersons, Inc.
), which declared a three-for-two stock split of its common
Shares of Under Armour have been steadily moving up since this
Zacks Rank #2 (Buy) company posted impressive fourth-quarter 2013
results amid an environment where many retailers grappled with
aggressive promotional strategies at the expense of margins to
gain market share during the holiday season.
Under Armour, which competes with
), delivered quarterly earnings of 59 cents a share surpassing
the Zacks Consensus Estimate of 54 cents, and increased
considerably from 47 cents earned in the year-ago quarter. In the
trailing 4 quarters, the company had beaten the Zacks Consensus
Estimate by an average of approximately 40%.
Aided by strong performance of the Apparel, Footwear and
Accessories categories, total revenue came in at $682.8 million,
up 35% year over year and ahead of the Zacks Consensus Estimate
of $620 million.
Under Armour's endeavors to keep itself on the growth
trajectory, includes the acquisition of MapMyFitness, opening the
first two UA Brand House retail outlets, and sustained
investments to strengthen Women's, Footwear and International
operations. Management now projects 2014 net revenue in the band
of $2.84 billion to $2.87 billion, up 22% to 23% from the prior
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