Apparel net revenues up at Under Armour
Under Armour Inc announced financial results for the second quarter ended June 30, 2011. Net revenues increased 42% in the second quarter of 2011 to $291.3 million compared with net revenues of $204.8 million in the prior year's period. Net income increased to $6.2 million in the second quarter of 2011 compared with $3.5 million in the prior year's period. Diluted earnings per share for the second quarter of 2011 were $0.12 on weighted average common shares outstanding of 52.5 million compared with $0.07 per share on weighted average common shares outstanding of 51.1 million in the prior year's period.
Second quarter apparel net revenues increased 36% to $204.8 million compared with $150.2 million in the same period of the prior year, driven by continued strength across each of the Men's, Women's, and Youth apparel businesses. Direct-to-Consumer net revenues, which represented 27% of total net revenues for the second quarter, grew 81% year-over-year. Second quarter footwear net revenues increased 31% to $46.9 million from $35.8 million in the prior year's period. Second quarter accessories net revenues increased 266% to $32.4 million from $8.9 million in the prior year's period, primarily driven by the transition of our previously licensed hats and bags business in-house which commenced January 2011.
Kevin Plank, Chairman, CEO, and President of Under Armour, Inc., stated, "We recently outlined our strategy to double our net revenues to over $2.1 billion by 2013 and our second quarter performance is indicative of the increased demand for the Under Armour Brand that will drive us there. We continue to be the thought leaders in all things performance, building off of successes like our launch of Charged Cotton and the development of our next product franchise, Storm Fleece. Our brand communication will expand in the coming months as we build our voice in footwear with Micro G cushioning technology. We will also begin to implement compelling new shop-in-shop formats with our existing retail partners. 2011 is a year where we are on the offensive to better meet the high expectations of our consumers, and we will continue to invest in operational initiatives that will help build a multi-billion dollar global platform."
Gross margin for the second quarter of 2011 was 46.3% compared with 48.8% in the prior year's quarter primarily due to less favorable apparel product margins and a lower year-over-year mix of net revenues from our licensing businesses, partially offset by a higher percentage of net revenues from our higher margin Direct-to-Consumer channel. Selling, general and administrative expenses as a percentage of net revenues were 42.4% in the second quarter of 2011 compared with 45.4% in the prior year's period, reflecting leverage of corporate services and marketing expenses. Marketing expenses for the second quarter of 2011 were 11.7% of net revenues compared with 13.4% in the prior year's quarter. Second quarter operating income grew 65% to $11.4 million compared with $6.9 million in the prior year's period.