Under Armour registers 42% growth in net revenues

02 Nov '11

5 min read

Under Armour Inc announced financial results for the third quarter ended September 30, 2011. Net revenues increased 42% in the third quarter of 2011 to $466 million compared with net revenues of $329 million in the prior year's period. Net income increased 32% in the third quarter of 2011 to $46 million compared with $35 million in the prior year's period.

Diluted earnings per share for the third quarter of 2011 were $0.88 on weighted average common shares outstanding of 52.5 million compared with $0.68 per share on weighted average common shares outstanding of 51.2 million in the prior year's period. Diluted EPS benefited approximately $0.04 as a result of our ongoing tax planning strategies.

Third quarter apparel net revenues increased 31% to $363 million compared with $277 million in the same period of the prior year, driven by continued strength across Men's, Women's, Youth, and new product offerings including Charged Cotton and Fleece. Direct-to-Consumer net revenues, which represented 22% of total net revenues for the third quarter, grew 73% year-over-year.

Third quarter footwear net revenues doubled to $52 million from $26 million in the prior year's period, primarily reflecting the introduction of new running footwear and earlier year-over-year shipments of basketball product. Third quarter accessories net revenues increased 211% to $40 million from $13 million in the prior year's period, primarily driven by the in-house transition of the Company's previously licensed hats and bags business which commenced in January 2011.

Kevin Plank, Chairman, CEO, and President of Under Armour, Inc., stated, "We surpassed a billion dollars in net revenues last year, and the Brand has already topped that milestone this year through the first three quarters. Our product engines are as strong as ever, as demonstrated by consecutive quarters of 40% plus growth for the first time since 2007.

We successfully launched Storm Fleece during the quarter, our cold weather Charged Cotton product. We also elevated our footwear message while continuing to enhance our global distribution network. Our strong results and the early acceptance of new products such as Storm Fleece and our Charge RC footwear give us confidence that the consumer continues to vote for our Brand."

Gross margin for the third quarter of 2011 was 48.4% compared with 50.9% in the prior year's quarter primarily due to less favorable apparel product margins and the ongoing impact of the hats and bags transition in 2011.

Selling, general and administrative expenses as a percentage of net revenues were 32.3% in the third quarter of 2011 compared with 33.6% in the prior year's period, reflecting leverage of corporate services and marketing expenses.

Marketing expenses for the third quarter of 2011 were 10.4% of net revenues compared with 10.9% in the prior year's quarter. Third quarter operating income grew 32% to $75 million compared with $57 million in the prior year's period.

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