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Revenue surges 27% at Under Armour in Q2

24
Jul '12
Under Armour Inc. announced financial results for the second quarter ended June 30, 2012. Net revenues increased 27% in the second quarter of 2012 to $369 million compared with net revenues of $291 million in the prior year's period.

Net income increased 7% in the second quarter of 2012 to $7 million compared with $6 million in the prior year's period. Net income growth trailed net revenues growth, primarily due to a planned shift of marketing expenses into the second quarter.

Diluted earnings per share for the second quarter of 2012 were $0.06 on weighted average common shares outstanding of 106 million compared with $0.06 per share on weighted average common shares outstanding of 105 million in the prior year's period.

Diluted earnings per share calculations for both periods reflect the Company's two-for-one stock split distributed on July 9, 2012.

Second quarter apparel net revenues increased 23% to $253 million compared with $205 million in the same period of the prior year, driven by strength across Men's, Women's, and Youth apparel businesses. Direct-to-Consumer net revenues, which represented 29% of total net revenues for the second quarter, grew 35% year-over-year.

Second quarter Footwear net revenues increased 44% to $67 million from $47 million in the prior year's period, primarily driven by new 2012 running styles, including the debut of UA Spine. Second quarter accessories net revenues increased 21% to $39 million from $32 million in the prior year's period.

Kevin Plank, Chairman, CEO, and President of Under Armour, Inc., stated, "Our heightened attention to innovation across all of our product lines continues to resonate with consumers. Our broad-based success during the quarter reflects our ability to build upon platform technologies such as Charged Cotton, while introducing new ideas such as ColdBlack.

“In Women's, we are redefining how the female athlete looks at our Brand with the strong introductions of our Studio line and Armour Bra. We are also excited about gaining momentum in the footwear space with game-changing products such as our $130 Highlight football cleat and the just-launched UA Spine running shoe."

Gross margin for the second quarter of 2012 was 45.9% compared with 46.3% in the prior year's quarter, primarily reflecting less favorable North American apparel and accessories product margins, partially offset by less sales discounts and allowances.

Selling, general and administrative expenses as a percentage of net revenues were 42.7% in the second quarter of 2012 compared with 42.4% in the prior year's period, reflecting the planned shift in marketing expenses. Marketing expenses for the second quarter of 2012 were 12.6% of net revenues compared with 11.7% in the prior year's quarter.

Second quarter operating income grew 3% to $12 million compared with $11 million in the prior year's period.


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