Under Armour Reports First Quarter Net Revenues Growth of 23% and First Quarter EPS Growth of 20%; Raises Full Year Outlook
- First Quarter Net Revenues Increased 23% to $384 Million
- First Quarter Diluted EPS Increased 20% to $0.28 from $0.23
- Company Updates 2012 Net Revenues Outlook to a Range of $1.78 Billion to $1.80 Billion (+21% to +22%)
- Company Raises 2012 Operating Income Outlook to a Range of $203 Million to $205 Million (+25% to +26%)
Baltimore, MD (April 20, 2012) - Under Armour, Inc. (NYSE: UA) today announced financial results for the first quarter ended March 31, 2012. Net revenues increased 23% in the first quarter of 2012 to $384 million compared with net revenues of $313 million in the prior year's period. Net income increased 21% in the first quarter of 2012 to $15 million compared with $12 million in the prior year's period. Diluted earnings per share for the first quarter of 2012 were $0.28 on weighted average common shares outstanding of 52.9 million compared with $0.23 per share on weighted average common shares outstanding of 52.4 million in the prior year's period.
First quarter apparel net revenues increased 23% to $283 million compared with $230 million in the same period of the prior year, driven by balanced performance across Men's, Women's, and Youth apparel businesses and introductions of innovative apparel products like ColdBlack and Armour Bra. Direct-to-Consumer net revenues, which represented 25% of total net revenues for the first quarter, grew 49% year-over-year. First quarter Footwear net revenues increased 24% to $64 million from $51 million in the prior year's period, primarily driven by new 2012 running styles and strength in baseball cleats. First quarter accessories net revenues increased 26% to $30 million from $24 million in the prior year's period.
Kevin Plank, Chairman, CEO, and President of Under Armour, Inc., stated, "First quarter results underscore that when we bring innovation and value to our product, we win with the consumer. Our ability to bring meaningful innovation to the athlete accelerated this past quarter. In addition to introducing new technologies like ColdBlack and Armour Bra, we enhanced our fit profiles in key Women's categories including bottoms and Charged Cotton, upgraded the fabrication and feel of our Tech Tee, and saw strong results with our $120 Charge RC running shoe. As we look at the rest of 2012, we will continue to emphasize innovation and design throughout our product spectrum, including a sharp focus on our baselayer and Footwear platforms."
Gross margin for the first quarter of 2012 was 45.6% compared with 46.4% in the prior year's quarter, primarily reflecting less favorable North American apparel and accessories product margins. Selling, general and administrative expenses as a percentage of net revenues were 39.2% in the first quarter of 2012 compared with 39.6% in the prior year's period, largely reflecting leverage of marketing expenses. Marketing expenses for the first quarter of 2012 were 11.5% of net revenues compared with 13.3% in the prior year's quarter, primarily driven by a strategic shift in spending to subsequent quarters. First quarter operating income grew 15% to $24 million compared with $21 million in the prior year's period.
Balance Sheet Highlights
Cash and cash equivalents decreased 3% to $107 million at March 31, 2012 compared with $111 million at March 31, 2011. The Company had no borrowings outstanding under its $300 million revolving credit facility at March 31, 2012. Inventory at March 31, 2012 increased 30% to $324 million compared with $249 million at March 31, 2011. Long-term debt increased to $76 million at March 31, 2012 from $14 million at March 31, 2011, primarily driven by the acquisition of the Company's corporate headquarters in July 2011.
Updated 2012 Outlook
The Company had previously anticipated 2012 net revenues growth at the low end of its 20% to 25% long-term growth target and 2012 operating income at the higher end of its 20% to 25% long-term growth target. Based on current visibility, the Company now expects 2012 net revenues in the range of $1.78 billion to $1.80 billion, representing growth of 21% to 22% over 2011. The Company also expects 2012 operating income in the range of $203 million to $205 million, representing growth of 25% to 26% over 2011. The Company continues to expect an effective tax rate of approximately 37.5% to 38.0% for the full year, compared to an effective tax rate of 38.2% for 2011. The Company continues to anticipate fully diluted weighted average shares outstanding of approximately 53.2 million to 53.4 million for 2012.
Mr. Plank concluded, "The first quarter represents our eighth consecutive quarter of revenue growth in excess of 20%. Just as importantly, we remain committed to driving bottom line performance and the team we have assembled is delivering through leadership, discipline, and process. I am excited that we recently augmented our team with key leaders in international, supply chain, and human resources. These valuable additions to our leadership team will be instrumental in reaching the long-term global potential of our Brand."
Conference Call and Webcast
The Company will provide additional commentary regarding its first quarter results as well as its updated 2012 outlook during its earnings conference call today, April 20th, 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 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.ua.com.
Forward Looking Statements
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