UNDER ARMOUR REPORTS MAJOR REVENUE GROWTH
Baltimore-based sports apparel company Under Armour, Inc. has announced mixed financial results for the second quarter ended June 30, 2016.
On the plus side, net revenues increased 28 percent in the second quarter of 2016 to $1.0 billion compared with net revenues of $784 million in the prior year’s period. Wholesale net revenues grew 27 percent year-over-year to $635 million compared to $501 million in the prior year’s period; Direct-to-Consumer net revenues grew 28 percent year-over-year to $321 million compared to $251 million in the prior year’s period; and North America net revenues for the second quarter grew 22 percent year-over-year.
Apparel net revenues increased 19 percent to $613 million compared with $515 million in the same period of the prior year, led by growth in men’s training, women’s training and golf. Footwear net revenues increased 58 percent to $243 million from $154 million in the prior year’s period, primarily reflecting the continued success of the basketball category led by the Curry signature basketball line as well as growth in running and cleated categories. Accessories net revenues increased 21 percent to $101 million from $83 million in the prior year’s period, driven primarily by growth in bags and headwear.
On the downside, operating income decreased 39 percent in the second quarter of 2016 to $19 million, inclusive of a $23 million impairment related to the liquidation of Sports Authority, compared with $32 million in the prior year’s period. Net income decreased 58 percent in the second quarter of 2016 to $6 million compared with $15 million in the prior year’s period. And the company realized diluted loss per share of $0.12 for Class A and B shares and diluted earnings per share of $0.15 for Class C shares, reflecting the impact of a $59 million stock dividend paid to Class C shareholders during the quarter.
“The strong broad-based results posted this quarter highlight the continued demand for the Under Armour brand around the world,” said Kevin Plank, the company’s CEO. “It also underscores the importance of diversifying our business and driving a sharper point of view with our consumers wherever they shop. In our largest category of apparel, we continue to add more dimension with a sport category focus and we remain incredibly proud of the success of our international and footwear growth driver. The Stephen Curry signature line has continued to drive strong momentum for the brand and our pinnacle football product, the Highlight Cleat, continues to lead the market.”
In his remarks, Plank also revealed that the company will launch its new brand later this year. “Starting with our launch this fall of Under Armour Sportswear, which we are calling UAS, we will continue to find new opportunities to bring more consumers into the Under Armour Brand, whether that is through compelling flagship retail, new partners in wholesale, or on a digital platform: he added. “We remain focused on making all athletes better and driving consistent revenue growth quarter after quarter. I am proud of what the team has accomplished so far this year and am incredibly excited about the future of Under Armour for the rest of 2016 and beyond.”
