Under Armour Sees Revenue Boost

Written by: Bob Larson Tennis on 1st November 2013

Under Armour Sees Revenue Boost

epa03847254 Sloane Stephens of the US hits a return to Serena Williams of the US during their match on the seventh day of the 2013 US Open Tennis Championship at the USTA National Tennis Center in Flushing Meadows, New York, USA, 01 September 2013. The US Open runs through Monday 09 September, a 15-day schedule for the first time. EPA/JUSTIN LANE |

Under Armour (UA) announced that net revenues increased 26% in the third quarter of 2013 to $723 million compared with net revenues of $575 million in the prior year’s period.

Net income increased 27% in the third quarter of 2013 to $73 million compared with $57 million in the same period. Diluted earnings per share for the third quarter of 2013 were $0.68 compared with $0.54 per share in the prior year’s period.

Under Armour has increased its presence in tennis over the past few years and now offers most types of apparel including shorts, shirts, socks and hoodies.

Third quarter apparel net revenues increased 26% to $561 million compared with $445 million in the same period last, primarily driven by the continued expansions of the Storm and Charged Cotton platforms, as well as the introduction of ColdGear Infrared technology.

Third quarter footwear net revenues increased 28% to $81 million from $63 million while accessories net revenues increased 18% to $64 million from $54 million, primarily driven by bags and headwear.

“We have a consistent formula that is driving success across our business: deliver newness and innovation and the consumer responds,” said Kevin Plank, Chairman and CEO of Under Armour. “This has been instrumental in driving net revenue growth in excess of 20% for the past 14 straight quarters and we will continue to fuel this strategy going forward.”

Gross margin for the third quarter of 2013 was 48.4% compared with 48.7% in the prior year’s quarter, which the company said reflected higher import duties. Third quarter operating income did increase to $121 million compared from $91 million last year.

Cash and cash equivalents increased 19% to $186 million, compared with $157 million on September 30, 2012.

Inventory did increase 59% to $497 million compared with $312 million on September 30, 2012. Long-term debt decreased to $54 million at September 30, 2013 from $72 million on the same date in 2012.

The company has raised its 2013 net revenues target to $2.26 billion, representing growth of 23% over 2012, and 2013 operating income of approximately $260 million, representing growth of 25% over 2012.

“The sustained momentum we are generating domestically will help fuel our global ambitions,” Plank said/ Many of these global efforts are ramping up with recent specialty stores opening in China, Japan and Mexico, E-Commerce platforms launching in Hong Kong and Taiwan, and new offices opening in Brazil and Chile.

The Oxen Group is high on the company’s prospects, stating that it has “jumped its price target to $92. “At this time, we see about 15% growth over the next six months,” the company stated. “We anticipate 2014 net revenues and operating income to be at the lower end of our long-term growth targets of 20% to 25%. …One of the best reasons to like Under Armour is that the company is now so much more than they used to be with just training. They are even trying to break the mold and enter into the women’s market with Women’s Studio. We believe that this side of the business is one of the biggest reasons to like UA.”

Under Armour sponsors 20-year-old American player Sloane Stephens, whom it signed back in 2010 before she broke out at the 2013 Australian Open, where she upset Serena Williams in the quarters. The company termed her match against Williams as “basically a two-hour Under Armour commercial.”

Topics: 10sballs.com, Australia Open, Kevin Plank, Serena Williams, Sloane Stephens, Tennis, Tennis News, Under Armour