Citizens of Baltimore have more to celebrate than just a Super Bowl victory. Headquartered in the Mid-Atlantic city is one of the most popular and fastest-growing apparel companies in the nation: Under Armour Inc (NYSE:UA), shares of which are up by more than 3% in afternoon trading.
In the absence of a publicized catalyst, Under Armour appears to be riding a number of waves higher today. First, the consumer is back with a vengeance. The nation’s two largest automakers reported impressive gains today in March sales. Ford Motor Company (NYSE:F)‘s were up by 6% on the heels of strong demand for its Explorer and Escape SUVs, while General Motors Company (NYSE:GM) saw its sales climb by a similar 6% thanks to an excellent showing by its Cadillac division.
The news sent stocks up virtually across the board: The S&P 500 is up 10 points, or 0.64%. Reaping an inordinate advantage today are retail-oriented stocks. In addition to Under Armour Inc (NYSE:UA), shares of both The Home Depot, Inc. (NYSE:HD) and Wal-Mart Stores, Inc. (NYSE:WMT) are climbing in intraday trading. The Home Depot, Inc. (NYSE:HD)’s are higher by 1.7%, making it one of the best-performing stocks on the Dow Jones Industrial Average. Meanwhile, Wal-Mart Stores, Inc. (NYSE:WMT) shares are up by 0.6%, firmly entrenching it among the blue-chip index’s gainers.
Potentially providing an extra boost to Under Armour Inc (NYSE:UA) specifically is the ongoing issue at Lululemon Athletica inc. (NASDAQ:LULU). In the middle of last month, the mainly female-focused sports apparel company recalled the entire season’s shipment of yoga pants after realizing they were too sheer. Lululemon Athletica inc. (NASDAQ:LULU)’s shares fell immediately after the problem was announced and have continued to plummet, down more than 10% over the past three weeks.
But beyond this, Under Armour is simply a great company. Since 2008, its sales have more than doubled, and its net income has more than quadrupled. And it has pulled this off without incurring an inordinate amount of debt. According to Standard & Poor’s Capital IQ, at the end of last year it had only $52.9 million in long-term debt relative to $341.8 million in cash and equivalents.
It’s for these reasons and others that we recently picked Under Armour as one of the “25 Best Companies in America.” As I noted at the time: “In the years since its humble beginnings in the basement of [CEO Kevin Plank's] grandmother’s townhouse, Under Armour Inc (NYSE:UA) has grown into a billion-dollar company that’s accomplished what few believed possible. It challenged Nike on its own turf and prevailed thanks to edgy marketing, Plank’s perseverance, and the signing of top-shelf athletes like Baltimore’s Ray Lewis and Boston’s Tom Brady.”
The article Under Armour Stock Up by More Than 3% originally appeared on Fool.com and is written by John Maxfield.
John Maxfield has no position in any stocks mentioned. The Motley Fool recommends Home Depot, Lululemon Athletica, and Under Armour. The Motley Fool owns shares of Under Armour.
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