Strong performance in the Apparel category led
Under Armour Inc
) to post robust first-quarter 2013 results. The quarterly
earnings of 7 cents a share substantially surpassed the Zacks
Consensus Estimate of 3 cents but decreased 50% from the year-ago
quarter due to increased marketing costs.
Total revenue came in at $471.6 million, up 22.7% year over
year and ahead of the Zacks Consensus Estimate of $468
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 in the
range of $2.21-$2.23 billion, up 21%-22% year over year. Earlier,
it forecasted 2013 revenues in the range of $2.20- $2.22 billion,
representing growth of 20%-21%.
Under Armour's largest product category, Apparel, witnessed a
22% rise in revenues to $345.5 million, reflecting strong
performance of new Baselayer product and healthy sales of Fleece.
The company's youth apparel businesses and innovative products
such as Studio, Running and Armour Bra also contributed
significantly to the growth.
Footwearnet revenue soared 26.9% to $80.8 million, reflecting
sturdy performance of the UA Spine Venom. Moreover, the company
is witnessing improved sales in its floor space at its key
distribution partners like
Dick's Sporting Goods Inc
Hibbett Sports, Inc
Foot Locker, Inc
Net revenue in the Accessories category rose 21.8% to $36.1
million during the quarter, while Licensing revenues elevated
18.8% year over year to $9.2 million.
Baltimore, Md.-based Under Armour announced that
direct-to-consumer net revenue surged 31% during the quarter,
representing 26% of the total revenue.
Gross profit rose 23.6% to $216.6 million during the quarter,
while gross profit margin expanded 30 basis points to 45.9%,
reflecting lower input product cost.
Operating income plunged 45% year over year to $13 million,
whereas operating margin contracted 350 basis points to 2.9%,
reflecting higher marketing and selling costs.
Going forward, Under Armour stated that lower input costs will
continue to boost its margins. Consequently, it expects an
improvement of 100 basis points in gross margin for the second
quarter of 2013. It also forecasts a modest expansion in gross
margin for 2013.
The company raised its operating income outlook for 2013 in
the range of $256 million - $258 million, up 23% - 24% year over
year. Earlier, the company projected operating income in the
range of $255 million - $257 million, reflecting growth of 22% -
23% year over year.
Under Armour opened 1 new Factory House store during the
quarter, taking the store count to 102. Going forward, the
company intends to add 10 new Factory House stores in
Other financial Details
Under Armour ended the quarter with cash and cash equivalents
of $255.7 million, total long-term debt of $60 million and
shareholders' equity of $843.2 million. The company had no
borrowings under its revolving credit facility of $300 million at
the end of the quarter.
Capital expenditures came in at approximately $11 million for the
reported quarter. Management now expects 2013 capital
expenditures to be at the higher end of its projected range of
$80 million - $85 million.
Currently, Under Armour carries a Zacks Rank #2 (Buy).
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