Under Armour, Inc. reported revenues in the second quarter increased 5.1% to $164.6 million from $156.7 million in the year-ago period. Net income increased 4.7% to $1.44 million from $1.38 million a year ago. Earnings per share was 3 cents in each period.
Second quarter apparel net revenues increased 16.5% to $112.0 million compared with $96.2 million in the same period of the prior year, driven by double-digit rate of growth in the Men's, Women's, and Youth apparel businesses. Footwear revenues were $37.5 million versus $46.0 million, an 18.5% decline. The company had previously indicated that Training footwear revenues were expected to decline year-over-year following the May 2008 launch of Performance Training Footwear.
Kevin Plank, chairman and CEO of Under Armour, stated, “Our results this quarter demonstrate our continued ability to successfully manage our business. We delivered 16% growth in apparel while maintaining our premium price positioning and exerted financial discipline around spending and investments. We are proud of what we have accomplished but will continue to hold ourselves to a higher standard.”
For the second quarter, operating income rose 3.3% to $3.4 million compared with $3.3 million in the prior year's period. Gross margin was 45.1%, slightly down from 45.3% in the prior year's quarter. Selling, general and administrative expenses as a percentage of net revenues decreased to 43.0% compared with 43.2% in the prior year's period. Marketing expense was 12.9% of revenues versus 14.4% in the prior year's period.
Cash and cash equivalents increased $66.2 million to $79.5 million at June 30, 2009 compared with $13.3 million at June 30, 2008. The company had no borrowings outstanding under its $200 million revolving credit facility at June 30, 2009. Net accounts receivable decreased 16.8% to $85.4 million at June 30 compared with $102.7 million at the same time a year ago. Inventory at quarter-end decreased 1.4% to $181.4 million compared with $183.9 million at June 30, 2008.
Based on improved visibility, the company is providing an initial outlook for 2009. The company remains cautious on the outlook for consumer spending for the balance of the year. Based on current projections, the company anticipates full year net revenues of approximately $810 million. Diluted earnings per share for the year is anticipated to be 80 to 82 cents per share. Selling, general, and administrative expenses for 2009 are still expected to grow in the low-teens on a percentage basis year-over-year.
In 2008, Under Armour earned 79 cents a share on sales of $804.9 million.
Plank concluded, “We have a powerful brand that resonates with consumers, a growth platform with enormous long-term opportunity, and a strengthening balance sheet. In 2009, we will continue to make key investments in our growth drivers, increase the level of expertise of our team, and become better operators. An incredible path lies ahead for our brand, and through innovation and execution we will deliver our message of performance to athletes across the globe.”
Under Armour, Inc.
Quarter and Six Months Ended June 30, 2009 and 2008
(Unaudited; in thousands, except per share amounts)
CONSOLIDATED STATEMENTS OF INCOME
Quarter % of Quarter % of
Ended Net Ended Net
6/30/09 Revenues 6/30/08 Revenues
------- -------- ------- --------
Net revenues $164,648 100.0% $156,677 100.0%
Cost of goods sold 90,370 54.9% 85,773 54.7%
------ ---- ------ ----
Gross profit 74,278 45.1% 70,904 45.3%
Operating expenses
Selling, general and
administrative
expenses 70,897 43.0% 67,630 43.2%
------ ---- ------ ----
Income from operations 3,381 2.1% 3,274 2.1%
Interest expense, net (583) (0.4%) (297) (0.2%)
Other income
(expense), net (362) (0.2%) (489) (0.3%)
---- ----- ---- -----
Income before income
taxes 2,436 1.5% 2,488 1.6%
Provision for income
taxes 997 0.6% 1,113 0.7%
--- --- ----- ---
Net income $1,439 0.9% $1,375 0.9%
====== === ====== ===
Net income available per
common share
Basic $0.03 $0.03
Diluted $0.03 $0.03
