There was no company-specific news to explain that surge in the stock price, but positive earnings reports from other top apparel retailers may have provided it with a much-needed boost.
Despite the broad market sell-off in September, some retail stocks were resilient. PVH (PVH 4.05%), the owner of Calvin Klein and Tommy Hilfiger, reported a better-than-expected quarter, sending its share price up 7% for the month.
Moreover, Under Armour's top rivals, Lululemon Athletica (LULU 0.59%) and Nike (NKE 2.80%), both delivered quarterly reports that featured sequential improvements. Investors seemed to interpret these results as a sign that the retail apparel segment is turning the corner.
The one clothing category that has experienced healthy demand recently is athleisure, which puts Under Armour in the sweet spot. In their most recent fiscal quarters, Lululemon's revenue increased 2% year over year, while Nike posted just a 1% decline.
Under Armour has underperformed its peers over the last few years, but with the shares so beaten down, investors are looking for any sign of a potential turnaround in sales. In its second-quarter earnings report, CEO Patrick Frisk cited improving momentum in the business in June and July, but management is remaining cautious for the rest of the year.
In contrast, Nike management says it anticipates a strong recovery starting in the second half of its fiscal 2021. (That period will begin in December.) However, given Under Armour's weak sales performance before the pandemic, further gains for Under Armour stock might be limited until the business can show improving sales trends for multiple quarters.