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Under Armour Women's & Youth Apparel unit perk up

30
Jul '08
Under Armour Inc announced financial results for the second quarter ended June 30, 2008.

Net revenues increased 30.0% in the second quarter of 2008 to $156.7 million compared to net revenues of $120.5 million in the second quarter of 2007.

Based on the seasonality of net revenues and the timing of marketing and other investments, the Company had previously indicated that earnings would be more heavily weighted to the back half of 2008 relative to 2007.

Second quarter net income was $1.4 million compared to $5.7 million in the same period of 2007. Diluted earnings per share for the second quarter of 2008 was $0.03 on weighted average common shares outstanding of 49.8 million compared to $0.11 per share on weighted average common shares outstanding of 49.9 million in the second quarter of the prior year.

For the first six months of 2008, net revenues increased 28.2% to $314.0 million from $244.9 million in the prior year.

These results were at the high-end of the Company's previously provided outlook of 26% to 28% net revenue growth for the first half of the year.

Diluted earnings per share for the first six months of 2008 was $0.09, compared to the Company's previous outlook of $0.06 for the first half of the year.

"Our 30% net revenue growth in the quarter illustrates our ability to make the right investments in the Company to build significant growth platforms and execute our plan," stated Kevin A. Plank, Chairman and CEO of Under Armour Inc.

"The strength of our Brand, the commitment of our team, and our ability to introduce new and innovative products to athlete keep us excited each and every day about the opportunities for our Company."

Mr. Plank continued, "On May 3rd, we entered the next chapter of our growth story with the launch of our Performance Training Footwear.

We developed a product that met the specific needs of our athlete, successfully generated excitement in the marketplace and brought consumers to the Training category.

The response to our Performance Trainer launch has been tremendous from both a consumer acceptance and retail sell-thru perspective.

It is that success that gives us the confidence to enter the Running Footwear business in the first half of 2009. We are entering the category with great momentum from our Performance Trainer launch and are doing so with a strong point of view on what Under Armour will mean to runners."

Apparel net revenues for the second quarter rose 10.3% to $96.2 million compared to $87.2 million in the same period of the prior year.

As reported last quarter, the Company implemented a new warehouse management system in its distribution center in April 2008.

Due to the systems switch, some customers elected to take shipments at the end of March that were originally planned for the beginning of April.

This impacted apparel growth in the second quarter, which is typically the lowest apparel revenue quarter for the year. For the first six months of 2008, apparel net revenues increased 18.1%, and the Company remains comfortable with achieving over 20% growth in apparel for the full year.

With the launch of Performance Training Footwear during the quarter, footwear revenues increased 128.8% to $46.0 million from $20.1 million in the second quarter of 2007.

Gross margin for the second quarter of 2008 was 45.3% compared to 49.0% in the prior year's quarter. The decline in gross margin was primarily driven by the higher proportion of footwear sales in the quarter, which have lower gross margins than apparel.


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