Baltimore, MD (April 27, 2010) - Under Armour, Inc. (NYSE: UA) today announced financial results for the first quarter ended March 31, 2010. Net revenues increased 15% in the first quarter of 2010 to $229.4 million compared with net revenues of $200.0 million in the first quarter of 2009. Diluted earnings per share for the first quarter of 2010 grew 75% to $0.14 on weighted average common shares outstanding of 50.9 million compared with $0.08 per share on weighted average common shares outstanding of 50.4 million in the first quarter of the prior year.
First quarter apparel net revenues increased 31% to $172.6 million compared with $132.2 million in the same period of the prior year, driven by strong growth in the Men's, Women's, and Youth apparel businesses. Direct-to-Consumer net revenues grew 73% year-over-year during the first quarter driven by strong growth in both the Factory House stores and Web business. Footwear net revenues in the first quarter of 2010 were $43.0 million compared with $56.9 million in the first quarter of 2009. The Company had previously indicated that Running and Training footwear revenues were expected to decline in 2010 compared with 2009.
Kevin Plank, Chairman and CEO of Under Armour, Inc., stated, "We delivered solid top line growth of 15% in the first quarter as we continued to bring the performance story to new athletes across sports, gender and geographies. Our apparel net revenues increased 31% with strength in both the wholesale and Direct-to-Consumer channels, evidence the Brand still has tremendous growth opportunities."
For the first quarter, operating income rose 72% to $13.6 million compared with $7.9 million in the prior year's period. Gross margin for the first quarter of 2010 increased to 46.9% compared with 44.6% in the prior year's quarter primarily due to improved apparel margins and increased sales in the higher margin Direct-to-Consumer channel. Selling, general and administrative expenses as a percentage of net revenues increased to 41.0% in the first quarter of 2010 compared with 40.6% in the prior year's period as a result of increased investments in product creation and supply chain as well as continued expansion of the Factory House stores.
Balance Sheet Highlights
Cash and cash equivalents were $166.0 million at March 31, 2010 compared with $65.6 million at March 31, 2009. Inventory at quarter-end decreased 10% to $147.9 million compared with $164.4 million at March 31, 2009. Net accounts receivable increased 4% to $110.3 million at March 31, 2010 compared with $106.0 million at March 31, 2009.
Outlook for 2010
The Company had previously anticipated 2010 annual net revenues in the range of $945 million to $960 million, an increase of 10% to 12% over 2009 and 2010 diluted earnings per share for the full year to grow in line with net revenue growth. Based on the first quarter results and improved visibility for the full year, the Company now expects 2010 annual net revenues in the range of $965 million to $985 million, an increase of 13% to 15% over 2009. The Company also expects 2010 diluted earnings per share in the range of $1.05 to $1.07, an increase of 14% to 16% over 2009.
Mr. Plank concluded, "The investments we are making in apparel and Direct-to-Consumer are paying off with strong growth, while we lay the foundation and build the infrastructure for our footwear and international growth engines. With our strong brand presence in the recent Winter Olympics, Winter X Games and the PGA Tour, we continue to move beyond football and baseball fields and take the Under Armour brand message to an ever-growing audience of athletes."
Conference Call and Webcast
Under Armour will host a conference call and webcast to discuss its financial results today, April 27th, at 8:30 a.m. ET. The call will be webcast live at http://investor.underarmour.com/events.cfm and will be archived and available for replay approximately three hours after the live event. Additional supporting materials related to the call will also be available at http://investor.underarmour.com. The Company's financial results are also available online at http://investor.underarmour.com/results.cfm.
About Under Armour, Inc.
Under Armour® (NYSE: UA) is a leading developer, marketer, and distributor of branded performance apparel, footwear, and accessories. The brand's moisture-wicking synthetic fabrications are engineered in many different designs and styles for wear in nearly every climate to provide a performance alternative to traditional products. The Company's products are sold worldwide and worn by athletes at all levels, from youth to professional, on playing fields around the globe. The Under Armour global headquarters is in Baltimore, Maryland, with European headquarters in Amsterdam's Olympic Stadium, and additional offices in Denver, Hong Kong, Toronto and Guangzhou, China. For further information, please visit the Company's website at www.underarmour.com.
Forward Looking Statements
Some of the statements contained in this press release constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, such as statements regarding our future financial condition or results of operations, our prospects and strategies for future growth, the development and introduction of new products, and the implementation of our marketing and branding strategies. In many cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "outlook," "potential" or the negative of these terms or other comparable terminology. The forward-looking statements contained in this press release reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause events or our actual activities or results to differ significantly from those expressed in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements, including, but not limited to: changes in general economic or market conditions that could affect consumer spending and the financial health of our retail customers; our ability to effectively manage our growth and a more complex business; our ability to effectively develop and launch new, innovative and updated products; our ability to accurately forecast consumer demand for our products and manage our inventory in response to changing demands; our ability to obtain the financing required to grow our business, particularly when credit and capital markets are unstable or tighten; increased competition causing us to reduce the prices of our products or to increase significantly our marketing efforts in order to avoid losing market share; loss of key suppliers or manufacturers or failure of our suppliers or manufacturers to produce or deliver our products in a timely or cost-effective manner; changes in consumer preferences or the reduction in demand for performance apparel, footwear and other products; our ability to accurately anticipate and respond to seasonal or quarterly fluctuations in our operating results; our ability to effectively market and maintain a positive brand image; the availability, integration and effective operation of management information systems and other technology; and our ability to attract and maintain the services of our senior management and key employees. The forward-looking statements contained in this press release reflect our views and assumptions only as of the date of this press release. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.