Under Armour Inc
), one of the leading developers, marketers and distributors of
branded sports apparel, footwear and accessories, posted
better-than-expected third-quarter 2012 results. The quarterly
earnings of 54 cents a share exceeded the Zacks Consensus
Estimate by a couple of cents and jumped 22.7% from the
Net revenue came in at $575.2 million, up 23.6% from the year-ago
quarter, and marginally missed the Zacks Consensus Estimate of
The company's strong year-over-year performance came on the back
of robust sales across all segments. The company now expects
fiscal 2012 net revenues of almost $1.82 billion, up 24% year
over year. Earlier, management had forecast revenue between $1.8
billion and $1.82 billion, reflecting a year-over-year growth of
22% to 24%.
The double-digit jump in the top-line was driven by a 22.4%
increase in apparel net revenue to $444.6 million, reflecting
growth across men's, women's and youth apparel businesses, and
innovative products such as Studio product and Armour Bra. Under
Armour remains optimistic about a healthy market for Studio
product and Armour Bra.
Footwear net revenue soared 21.4% to $63.2 million, due to the
new running footwear introduced in 2012, which includes the
strong performance of the UA Spine.
Accessories net revenue rose 37.1% to $54.4 million during the
quarter, reflecting healthy performance by headwear and bands.
Licensing revenue elevated 24.8% year over year to $13 million.
Baltimore, Maryland-based Under Armour announced that
direct-to-consumer net revenue surged 31% during the quarter,
representing 24% of the total revenue. Under Armour opened four
new Factory House stores during the quarter under review,
increasing the store count to 96. Moreover, the company expects
to open five new Factory House stores during the fourth quarter.
Gross profit rose 24.6% to $280.4 million during the quarter,
while gross profit margin expanded 30 basis points to 48.7%,
reflecting lower input costs and positive contribution from North
American region. Operating income jumped 21.4% to $91 million,
whereas operating margin shriveled 30 basis points to 15.8%,
reflecting a 60 basis point rise in the selling general and
administrative expenses as a percentage of sales.
The company now expects gross margins to decline by 40 basis
points year over year. Earlier, Under Armour projected gross
margins to remain flat to marginally down compared with the prior
Operating income is now projected to be $207 million, up 27% year
over year for fiscal 2012. Earlier, the company expected
operating income in the range of $205 million to $207.
Under Armour ended the quarter with cash and cash equivalents of
$157 million, total long-term debt of $72.2 million and
shareholders' equity of $758.4 million. The company had no
borrowings under its revolving credit facility of $300 million at
the end of the quarter.
Capital expenditures were approximately $16 million for the
quarter under review. Management now expects fiscal 2012 capital
expenditures to be at the upper end of the previous guidance
range of $60 million and $65 million.
Currently, Under Armour, which competes with
Columbia Sportswear Company
), holds a Zacks #3 Rank that translates into a short-term 'Hold'
COLUMBIA SPORTS (COLM): Free Stock Analysis
NIKE INC-B (NKE): Free Stock Analysis Report
UNDER ARMOUR-A (UA): Free Stock Analysis
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