Accessories Help Under Armour into Strong Q2 Results

In What's New, Industry News by Jeff Prine

Under ArmourBaltimore, MD—Under Armour said Thursday that its second quarter profit and sales topped expectations, buoyed by sales increases in its accessories business.

For the quarter ended June 30, the athletic-wear company posted earnings of $17.6 million, or 16 cents a share, compared to $6.7 million in profit in second quarter 2012. Analysts’ average estimate expected 14 cents a share in earnings.

Net revenue increased 23% to $455 million, ahead of analysts’ expectations for $449.1 million in sales. Gross margin widened to 48.3% from 45.9%.

While one of its smaller businesses, the company’s accessories category posted a 30.1% increase to $51 million during the quarter. Licensing revenues elevated 16.7% year over year to $11.6 million.

Its apparel business registered its 15th straight quarter of at least 20% growth: apparel sales jumped 22.7% to $310.2 million, reflecting strong performance of the new HeatGear Sonic Baselayer product. The company’s youth apparel and innovative products such as Studio and Armour Bra also contributed significantly to the growth.

Footwear net revenue increased 21.1% to $81.7 million, due to strong demand for its Highlight cleats and UA Spine products and stronger distribution network via shop-in-shops at its key partner Dick’s Sporting Goods Inc.

For its full fiscal year, Under Armour now predicts revenue of between $2.23 billion and $2.25 billion this year, up from its previous forecast of $2.21 billion and $2.23 billion.

“We continued to create great excitement in the marketplace during the second quarter through innovative design across all platforms–apparel, footwear and accessories– speaking loudly to the next generation of Under Armour athletes,” said Kevin Plank, chairman/ceo. “While we continue to see great momentum in our apparel business, we are demonstrating share gains in footwear on the field with baseball and football cleats, as well as building upon our momentum in running footwear with foundational platforms like UA Spine.”


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