Under Armour Reports First Quarter 2010 Net Revenue Growth of 15% and EPS Growth of 75%; Raises Net Revenue and EPS Outlook for the Full Year
- Net Revenues Increased 15% to $229.4 Million
- Net Income Increased 81% to $7.2 Million; Diluted EPS Increased 75% to $0.14
- Apparel Net Revenues Increased 31% to $172.6 Million
- Direct-to-Consumer Net Revenues Increased 73%
- Cash and Cash Equivalents Increased 153% Year-Over-Year to $166.0 Million at Quarter-End
- Company Raises 2010 Net Revenue Outlook to $965 Million to $985 Million (+13% to +15%) from $945 Million to $960 Million (+10% to +12%)
- Company Raises 2010 EPS Outlook to $1.05 to $1.07 (+14% to +16%) from $1.01 to $1.03 (+10% to +12%)
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
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