Under Armour, Inc. announced financial results for the third quarter ended September 30, 2013. Net revenues increased 26% in the third quarter of 2013 to $723 million compared with net revenues of $575 million in the prior year's period.
Net income increased 27% in the third quarter of 2013 to $73 million compared with $57 million in the prior year's period. Diluted earnings per share for the third quarter of 2013 were $0.68 compared with $0.54 per share in the prior year's period.
Third quarter apparel net revenues increased 26% to $561 million compared with $445 million in the same period of the prior year, primarily driven by the continued expansions of the Storm and Charged Cotton platforms, as well as the introduction of ColdGear Infrared technology.
Third quarter footwear net revenues increased 28% to $81 million from $63 million in the prior year's period, led by strong gains in both running and football. Third quarter accessories net revenues increased 18% to $64 million from $54 million in the prior year's period, primarily driven by bags and headwear. Direct-to-Consumer net revenues, which represented 25% of total net revenues for the third quarter, grew 34% year-over-year.
Kevin Plank, Chairman and CEO of Under Armour, Inc., stated, "We have a consistent formula that is driving success across our business: deliver newness and innovation and the consumer responds. This has been instrumental in driving net revenue growth in excess of 20% for the past fourteen straight quarters and we will continue to fuel this strategy going forward. During the quarter we introduced our latest apparel innovation, ColdGear Infrared, which utilizes a ceramic thermo-conductive inner coating to absorb and retain body heat. With the limited release of Speedform we also provided a glimpse of where we can take footwear and redefine fit in the category."
Gross margin for the third quarter of 2013 was 48.4% compared with 48.7% in the prior year's quarter, primarily reflecting higher import duties, partially offset by the net impact of lapping the prior year's sourcing challenges.
Selling, general and administrative expenses as a percentage of net revenues were 31.7% in the third quarter of 2013 compared with 32.9% in the prior year's period, primarily reflecting leverage of marketing expenses. Third quarter operating income increased to $121 million compared with $91 million in the prior year's period.
Balance Sheet Highlights
Cash and cash equivalents increased 19% to $186 million at September 30, 2013 compared with $157 million at September 30, 2012. Inventory at September 30, 2013 increased 59% to $497 million compared with $312 million at September 30, 2012. Long-term debt decreased to $54 million at September 30, 2013 from $72 million at September 30, 2012.