Under Armour Notches 20th Consecutive Quarter Above 20 Percent Rev Growth

4/22/2015
Under Armour, Inc. reported financial results for the first quarter ended March 31, 2015. Net revenues increased 25 percent in the first quarter of 2015 to $805 million compared with net revenues of $642 million in the prior year's period. 

On a currency neutral basis, net revenues increased 27 percent compared with the prior year's period.  Net income decreased 13 percent in the first quarter of 2015 to $12 million compared with $14 million in the prior year's period, inclusive of costs related to the previously announced acquisitions of Endomondo and MyFitnessPal during the first quarter.

First quarter apparel net revenues increased 21 percent to $555 million compared with $459 million in the same period of the prior year, driven primarily by new product introductions in baselayer and training.  First quarter footwear net revenues increased 41 percent to $161 million from $114 million in the prior year's period, highlighted by expanded SpeedForm running offerings as well as the introduction of the Curry One basketball shoe. 

First quarter accessories net revenues increased 23 percent to $63 million from $52 million in the prior year's period.  Direct-to-consumer net revenues, which represented 25 percent of total net revenues for the first quarter, grew 21 percent year-over-year.  International net revenues, which represented 12 percent of total net revenues for the first quarter, grew 74 percent year-over-year.

"We reached an important milestone to start 2015 with our 20th straight quarter above 20 percent net revenue growth," said Kevin Plank, chairman and CEO of Under Armour, Inc. "That's five years since our last quarter with less than 20 percent revenue growth, or to put it more topically: back before [golfer] Jordan Spieth had his driver's license.

"This represents five years of consistently exceeding the demands of our athletes and just as importantly, anticipating what those demands will be next.  While the 25 percent growth achieved in the first quarter was a great start to the year, we are even more excited with the foundation we are establishing for future growth," Plant continued. "Within our Connected Fitness platform, we closed our two acquisitions of Endomondo and MyFitnessPal to create the world's largest digital health and fitness community.  We have already added over 10 million unique registered users to our platform since our initial February announcement, bringing the total Connected Fitness community to over 130 million unique registered users, more than 60 percent of which are women.

"To build on this, we are expanding our partnership with SAP for the infrastructure that will help us create a single integrated view of our consumer. We believe the brand that can build true communities among our consumers by improving their health and fitness will be best positioned and we are focused on the competitive advantage we enjoy by having the world's largest digital health and fitness community.

"We opened a 30,000 square foot Brand House store on the Magnificent Mile in Chicago, while also debuting our first stores in Brazil and the Middle East which contributed to the 74 percent international growth for the quarter. We will add over 100 total stores outside the United States in 2015, and this past quarter we opened our first stores in Abu Dhabi and Brazil," added Plank.

"We experienced tremendous demand for our new SpeedForm Gemini running shoe and the Curry One basketball shoe with even bigger things to come in these categories," he said "And in our largest product category, apparel, we crossed 20 percent growth for the 22nd consecutive quarter. These are powerful engines that will help ensure the brand remains firmly entrenched as the leading growth company in our industry."

Under Armour's relationship with Jordan Spieth likely will pay big dividends for the brand. "To quote the great Dodgers executive Branch Rickey, luck is the residue of design and knowing that we have Jordan Spieth as the face of Under Armour Golf into the future, solidifies our presence in the category, and aligns us with a new face of golf in the United States," Plank said. "In golf apparel, our team did a great job of outfitting Jordan for the Masters and it provided terrific visibility for our golf apparel and footwear. When we signed him, we knew he had the ability to help drive our brand, beyond just golf, and that we needed to align our product stories with his aggressive, young, and fearless personality."

Mobile represented more than 40 percent of e-commerce traffic and nearly 20 percent of digital sales during the period.
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