Net Revenues Increased 27.1% to $200.0 Million, Highlighted by Company's Entry into Running Footwear
Baltimore, MD (April 28, 2009) - Under Armour, Inc. (NYSE: UA) today announced financial results for the first quarter ended March 31, 2009. Net revenues increased 27.1% in the first quarter of 2009 to $200.0 million compared with net revenues of $157.3 million in the first quarter of 2008. Diluted earnings per share for the first quarter of 2009 grew 33.3% to $0.08 on weighted average common shares outstanding of 50.4 million compared with $0.06 per share on weighted average common shares outstanding of 50.2 million in the first quarter of the prior year.
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.
Mr. Plank concluded, "We are pleased with our results this quarter as the investments in our footwear growth engine generated strong top line increases and effective cost management allowed us to deliver bottom line leverage on that growth. While we remain cautious in our business outlook for the year, we are focused on leveraging our position as the athletic brand of this generation to deliver long-term value for our shareholders."
Balance Sheet Highlights
Cash and cash equivalents were $65.6 million at March 31, 2009 compared with $17.6 million at March 31, 2008. The Company had no borrowings outstanding under its $200 million revolving credit facility at March 31, 2009. Inventory at quarter-end decreased 2.1% to $164.4 million compared with $167.9 million at March 31, 2008.
Brad Dickerson, Chief Financial Officer of Under Armour, Inc., stated, "We will continue to focus on the financial strength of our organization, controlling costs while prioritizing investments, and protecting our balance sheet through efforts targeted at working capital efficiency and liquidity. Progress made in the areas of cost management and inventory management will be key to the success of the organization long-term."
Conference Call and Webcast
The Company will provide additional commentary regarding its first quarter results and 2009 outlook during its earnings conference call today, April 28th, 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 natural fiber 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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