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Under Armour reports dynamic growth

Sep 5, 2014 United States
Under Armour reports dynamic growth
Second quarter and first semester results characterized by two digits growth in revenue and net income. Excellent performance in the international markets, while the US market continues to increase revenue at a paced rhythm. All product categories with two digits growth
"The broad-based momentum that we have been experiencing recently showed no signs of stopping during the second quarter. While we continued to add more dimension to our largest growth driver in apparel, we were particularly encouraged by the brand response we are seeing in both our footwear and international businesses. From our latest pinnacle football cleat, the Highlight ClutchFit, to the successful SpeedForm running initiative, our footwear is clearly resonating with consumers and we are well positioned to expand these platforms in the seasons ahead. In international, we are executing in all regions and are proud of key second quarter milestones such as our initial product launch in Brazil and partnering with key distributors to open the first Brand House stores in Panama, the Philippines and Singapore", commented Kevin Plank, Chairman and CEO of Under Armour, Inc.

Under Armour's net revenue increased 34.1% in the second quarter of 2014 to 609.7 million US dollars compared with net revenue of 454.5 million US dollars in 2013. Net income in the second quarter of 2014 of 17.7 million US dollars was quite flat compared with the prior year's period (17.6 million US dollars), largely reflecting marketing and innovation expenses. Diluted earnings per share for the second quarter of 2014 were 0.08 US dollars, unchanged from the prior year's period.

Second quarter apparel net revenue increased 35.4% to 420.0 million US dollars driven by expanded offerings in categories such as golf, outdoor, running, training, and women's studio. Second quarter footwear net revenues increased 34.2% to 109.5 million US dollars from 81.6 million US dollars in the prior year's period, led by new introductions in running. Second quarter accessories net revenues increased at a slower but still very interesting rhythm (+17.5%), standing at 59.9 million US dollars. 

International net revenues, which represented 8.5% of total net revenues for the second quarter, grew 101.0%. The US market presented a dynamic growth rate of 30.1%.

Gross margin for the second quarter of 2014 was 49.2% compared with 48.3% in the prior year's quarter, primarily driven by favourable year-over-year sales mix and product margins. Second quarter operating income increased 7.4% to 35.0 million US dollars compared with 32.3 million US dollars in the prior year's period.

As for the semester, company’s net revenue stood at 1 251.3 million US dollars, up by 35.1% from previous year, and operating income was 61.6 million US dollars (an increase of 34.4% from similar period in 2013). Net income for the first six months of the year stood at 31.2 million US dollars, growing 23.0% from the first semester in 2013.

All product categories achieved two digits growth rates in the revenue for the semester, with apparel showing a 34.1% increment, footwear 37.6% and accessories 28.0%.

The domestic market (US) grew 31.1% in the semester, while the international markets increase its revenue formation by 96.1%.

Based on current visibility, the company expects 2014 net revenue in the range of 2.98 billion US dollars to 3.0 billion US dollars, representing growth of 28% to 29% over 2013, and 2014 operating income in the range of 343 million US dollars to 345 million US dollars, representing growth of 29% to 30% over 2013.

Mr. Plank concluded, "The enhanced visibility and execution of both our Footwear and International growth engines during the first half of 2014 gives us greater conviction in achieving our full year financial targets. At the same time, we are better positioned to broaden our consumer reach this quarter as we launch new relationships with the US Naval Academy, the University of Notre Dame, as well as the Cruz Azul Fútbol Club in Mexico. In addition, this month we are launching our second Brand Holiday of 2014, our first global campaign dedicated to women and one that will reinforce our commitment to build out this important growth driver. We are also extremely excited with our progress in Connected Fitness, where we just surpassed 27 million users and are adding nearly one million new users each month, as well as forging relationships that will empower this community in the years ahead."

Shares of Under Armour, Inc. were last traded on the 3rd of September at 70.34 US dollars at the New York Stock Exchange.

Under Armour, Inc., incorporated in August 1996, is engaged in the development, marketing and distribution of apparel, footwear and accessories for men, women and youth. Most of its products are sold in North America. Internationally, Under Armour sells its products in certain countries in Europe, though a third party licensee in Japan, and via distributors in other foreign countries. In addition, in 2012 the company opened a store in China. In November 2013, the Company acquired MapMyFitness.

For more information about Under Armour, Inc. please refer to the company’s website.

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