Under Armour Q1 Revenues Up 27%, EPS Soars 33%

ADMIN

• April 28 2009
• 8 comments

Under Armour, which is making a strong push into the snowboarding market, released its Q1 earnings report today announcing that earnings and revenue soared compared to 2008 figures, primarily due to its launch into the footwear category and direct sales. The highlights include:

• Net Revenues Increased 27.1% to $200.0 Million, Highlighted by Company’s Entry into Running Footwear
• Operating Income Increased 83.7% to $7.9 Million
• Diluted EPS Increased 33.3% to $0.08
• Cash & Cash Equivalents Increased $48.0 Million Year-Over-Year to $65.6 Million at Quarter-End; No Borrowings Outstanding Under $200 Million Revolving Credit Facility

According to the statement:

First quarter apparel net revenues increased 2.4% to $132.2 million compared with $129.2 million in the same period of the prior year. Footwear net revenues in the first quarter of 2009 increased $40.3 million to $56.9 million compared with net revenues of $16.6 million in the first quarter of 2008. The growth in footwear net revenues was driven by the Company’s entry into Running Footwear during the quarter as well as shipments of Performance Training Footwear, which launched in the second quarter of 2008. Net revenues in the direct-to-consumer category grew 37.5% year-over-year during the first quarter.

Kevin Plank, Chairman and CEO of Under Armour, Inc., stated, “The athletic footwear market represents an enormous growth opportunity for the Under Armour Brand. With each new category we enter, our ultimate goal is to build momentum by developing innovative footwear technology, generating support from our key retail partners, and delivering product to our core consumer that drives our credibility as a performance footwear brand. Our success with previous categories laid the groundwork for our most recent advancement - our entry into Running Footwear - and our performance in Running has paved the way to establish Under Armour as a major player in the athletic footwear market over the long-term.”

For the first quarter, operating income rose 83.7% to $7.9 million compared with $4.3 million in the prior year’s period. Gross margin for the first quarter of 2009 was 45.3% compared with 47.6% in the prior year’s quarter due to several factors including the higher proportion of lower gross margin footwear sales. Selling, general and administrative expenses as a percentage of net revenues decreased to 41.3% in the first quarter of 2009 compared with 44.9% in the prior year’s period. Marketing expense for the first quarter of 2009 was 16.5% of net revenues versus 17.8% in the prior year’s period. The Company still expects to invest in marketing at the high-end of the range of 12% to 13% of net revenues for the full year.