Q2 net revenue surges 29% at Under Armour
Net revenue for the second quarter ended June 30, 2015 surged 29 per cent year over year at performance footwear, apparel and equipment manufacturer and marketer Under Armour, Inc.
Net revenues drove up 29 per cent in the second quarter of 2015 to $784 million compared with $610 million in the prior year's second quarter. On a currency neutral basis, net revenues climbed 31 per cent.
However, net income declined 17 per cent to $15 million in the reporting quarter as against $18 million in the second quarter of previous year.
Diluted earnings per share for the second quarters of 2015 and 2014, stood at $0.07 and $0.08 per share respectively, inclusive of the impacts of the Endomondo and MyFitnessPal acquisitions.
Gross margin for the second quarter of 2015 was 48.4 per cent down from 49.2 per cent in the same quarter of last year, primarily reflecting impact of foreign exchange rates and planned air freight expenses.
SG&A expenses as a percentage of net revenues were 44.3 per cent in the quarter under review compared with 43.5 per cent from the last year's second quarter.
“This mainly reflects investments to support Connected Fitness and the opening of global Brand House stores in the quarter,” Under Armour explained.
Second quarter operating income too fell 8 per cent to $32 million from $35 million in the prior year's second quarter.
Cash and cash equivalents decreased 43 per cent to $171 million at June 30, 2015 compared with $300 million at June 30, 2014, while inventory rose 26 per cent year on year to $837 million.
Total debt increased steeply to $716 million at June 30, 2015 as against $197 million at June 30, 2014, primarily reflecting borrowing to fund the two acquisitions.
The Company had previously anticipated 2015 net revenues of approximately $3.78 billion, representing growth of 23 per cent over 2014.
It had also projected 2015 operating income in the range of $400 million to $408 million, representing growth of 13-15 per cent over 2014.
Based on current visibility, the Company expects 2015 net revenues of approximately $3.84 billion and operating income in the range of $405-408 million.
“The 2015 guidance continues to reflect the net dilutive impact from the acquisitions, as well as impact of the strong dollar negatively impacting our operating margin within our global businesses,” it explained.
CEO Kevin Plank said, "More than ever before, this year has highlighted that right investments are key to not only driving near-term results, but building the foundation for unlimited potential of the brand.”
CFO Brad Dickerson also said, "The ongoing strength of our brand and execution of our business plan give us confidence in raising our full year top line outlook.”
“In addition, the confluence of our sports marketing success stories has provided a unique opportunity to drive investment toward areas that we see are key to long-term sustainable growth,” he observed. (AR)
Fibre2Fashion News Desk - India