United States Of America : Under Armour targets sales growth at 25% CAGR through 2018

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Under Armour targets sales growth at 25% CAGR through 2018

23
Sep '15

Athletics apparel marketer, Under Armour has unveiled a plan under which it is targeting to grow at a CAGR of 25 per cent to reach net revenues of $7.5 billion in 2018 from $3.1 billion net revenues in 2014.

At its biennial Investor Day meeting, Under Armour highlighted many of its strategies to continue strong growth in key areas of its business.

This includes expanding its core businesses in apparel, North America and global wholesale as well as intensifying its focus on evolving its consumer-centric sport category structure.

The company believes these strategies and others will be significant to seizing opportunities and driving stronger growth in newer areas such as International, Footwear, Global Direct-to-Consumer and Connected Fitness.

In a press release, it also said that it has targeted operating income at $800 million in 2018, representing a 23 per cent compounded annual growth rate from $354 million in 2014.

“This anticipated performance includes a consistent gross margin of approximately 49 per cent,” the company added.

Below the operating line, the impacts of higher interest expense and share count dilution are expected to be offset by a reduction in the company's effective tax rate to the mid-30s by 2018.

“This is expected to result in earnings per share growth that is approximately in-line with operating income growth,” it informed.

Consistent with current year guidance, the company expects to deploy capital at an elevated rate to develop the capabilities and capacity needed to scale the global business.

The company will continue to evaluate its capital needs through 2018 as it plans to spend between 8-10 per cent net revenues annually.

CEP Kevin Plank stated, "For nearly 20 years, the Under Armour brand has been built on the promise to make all athletes better.”

“The investments we have made and will continue to make are a testament to the runway of growth we see ahead and provide us with the confidence in raising our long-term net revenues growth rate target,” Plank too added. (AR)

Fibre2Fashion News Desk – India

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