Apparel biz perks up at Baltimore-based retailer

29 Jul '09

4 min read

Under Armour, Inc. announced financial results for the second quarter ended June 30, 2009. Net revenues increased 5.1% in the second quarter of 2009 to $164.6 million compared with net revenues of $156.7 million in the second quarter of 2008.

Net income increased 4.7% year-over-year to $1.4 million in the second quarter of 2009. Diluted earnings per share for the second quarter of 2009 was $0.03 on weighted average common shares outstanding of 50.6 million compared with $0.03 per share on weighted average common shares outstanding of 50.3 million in the second quarter of the prior year.

Second quarter apparel net revenues increased 16.5% to $112.0 million compared with $96.2 million in the same period of the prior year, driven by double-digit rate of growth in the Men's, Women's, and Youth apparel businesses.

Footwear net revenues in the second quarter of 2009 were $37.5 million compared with net revenues of $46.0 million in the second quarter of 2008. The Company had previously indicated that Training footwear revenues were expected to decline year-over-year in the second quarter of 2009 following the May 2008 launch of Performance Training Footwear. Direct-to-consumer net revenues grew 36.6% year-over-year during the second quarter.

Kevin Plank, Chairman and CEO of Under Armour, Inc.,stated, "Our results this quarter demonstrate our continued ability to successfully manage our business. We delivered 16% growth in apparel while maintaining our premium price positioning and exerted financial discipline around spending and investments. We are proud of what we have accomplished but will continue to hold ourselves to a higher standard."

For the second quarter, operating income rose 3.3% to $3.4 million compared with $3.3 million in the prior year's period. Gross margin for the second quarter of 2009 was 45.1% compared with 45.3% in the prior year's quarter. Selling, general and administrative expenses as a percentage of net revenues decreased to 43.0% in the second quarter of 2009 compared with 43.2% in the prior year's period. Marketing expense for the second quarter of 2009 was 12.9% of net revenues versus 14.4% in the prior year's period.

For the first six months of 2009, net revenues increased 16.1% to $364.6 million compared with $314.0 million in the prior year. Net income for the first six months of 2009 increased 27.2% to $5.4 million compared with $4.2 million in the same period of 2008. Diluted earnings per share for the first six months of 2009 was $0.11 on weighted average common shares outstanding of 50.5 million compared with $0.08 per share on weighted average common shares outstanding of 50.3 million in the prior year.

Balance Sheet Highlights
Cash and cash equivalents increased $66.2 million to $79.5 million at June 30, 2009 compared with $13.3 million at June 30, 2008. The Company had no borrowings outstanding under its $200 million revolving credit facility at June 30, 2009. Net accounts receivable decreased 16.8% to $85.4 million at June 30, 2009 compared with $102.7 million at June 30, 2008. Inventory at quarter-end decreased 1.4% to $181.4 million compared with $183.9 million at June 30, 2008.

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