Under Armour Inc
) posted third-quarter 2013 earnings of 68 cents a share that
beat the Zacks Consensus Estimate by a couple of cents and surged
25.9% from 54 cents earned in the year-ago quarter.
Aided by strong performance of the Apparel and Footwear
categories, total revenue came in at $723.1 million, up 25.7%
year over year and ahead of the Zacks Consensus Estimate of $709
Under Armour's largest product category, Apparel, once again
witnessed strong sales. Apparel sales jumped 26.1% to $560.9
million, reflecting strength across Storm and Charged Cotton
platforms, coupled with ColdGear Infrared technology, which has
been recently introduced.
Footwear net revenue soared 28.3% to $81 million during the
quarter. The company is witnessing strong demand of its Highlight
cleats and UA Spine products.
Net revenue in the Accessories category rose 18.4% to $64.4
million during the quarter led by headwear and bags, while
Licensing revenue elevated 29.4% year over year to $16.9
Under Armour announced a 34% increase in direct-to-consumer
net revenue during the quarter, representing 25% of the total
Gross profit rose 24.9% to $350.1 million, however, gross
profit margin contracted 30 basis points to 48.4% due to a rise
in import duties. Operating income jumped 32.8% to $120.8
million, whereas operating margin expanded 90 basis points to
This Zacks Rank #3 (Hold) stock opened 6 new Factory House
stores during the quarter, taking the store count to 112. The
company now intends to add 4 more Factory House stores in the
remainder year, thereby bringing the total to
Other Financial Details
Under Armour ended the quarter with cash and cash equivalents
of $186.4 million, long-term debt dropped to $54 million from $72
million in the prior-year period, while shareholders' equity was
Capital expenditures came in at approximately $23 million for
the reported quarter. Management now expects 2013 capital
expenditures to be $95 million, up from its earlier projected
range of $85 million to $90 million.
The company witnessed strong year-over-year performances
across all its segments. Consequently, Under Armour raised its
guidance for 2013. The company now expects net revenue of $2.26
billion, up 23% year over year. Earlier, it forecasted 2013
revenue in the range of $2.23 billion to $2.25 billion,
representing growth of 22% to 23%.
Going forward, Under Armour forecasts a 50 basis points
decline in gross margin during the fourth quarter. However, the
company now projects operating income for 2013 to be $260
million, up 25% year over year. Earlier, the company projected
operating income in the range of $258 million to $260 million,
reflecting growth of 24% to 25% year over year.
However for 2014, management provided a cautious outlook with
both net revenue and operating income to come in at the lower end
of long-term growth targets of 20% to 25%.
Other Stocks to Consider
Until any further upgrade in Under Armour's Zacks Rank, other
stocks in the Apparel, Footwear & Accessories industry worth
Brown Shoe Co. Inc.
), both carrying a Zacks Rank #1 (Strong Buy) and
) sporting a Zacks Rank #2 (Buy).
BROWN SHOE CO (BWS): Free Stock Analysis
CARTERS INC (CRI): Free Stock Analysis Report
NIKE INC-B (NKE): Free Stock Analysis Report
UNDER ARMOUR-A (UA): Free Stock Analysis
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