Under Armour has announced financial results for the second quarter ended 30 June 2015. Net revenues increased 29% in Q2 2015 to US$784 million compared with net revenues of US$610 million in the previous year period.
On a currency neutral basis, net revenues increased 31% year on year. Net income decreased 17% in Q2 2015 to US$15 million compared with US$18 million in the prior year period; and diluted earnings per share for the second quarter of 2015 were US$0.07 compared with US$0.08 per share in Q2 2014. Although the company notes that this was inclusive of the impacts of the Endomondo and MyFitnessPal acquisitions, with MapMyFitness another key acquisition for the company in the digital ‘Connected Fitness’ area.
Second quarter apparel net revenues increased 23% to US$515 million compared with US$420 million in the same period of the prior year, driven primarily by ‘enhanced product offerings in baselayer and training’. Second quarter footwear net revenues increased 40% to US$154 million from US$110 million in the prior year’s period.
Second quarter accessories net revenues increased 39% to US$83 million, driven primarily by new introductions across the bags category. Direct-to-consumer net revenues, which represented 32% of total net revenues for the second quarter, grew 33% year on year. International net revenues, which represented 11% of total net revenues for the second quarter, grew 93% year-over-year.
Kevin Plank, Chairman and CEO of Under Armour said “More than ever before, this year has highlighted that the right investments are key to not only driving near-term results, but building the foundation for the unlimited potential of the Under Armour brand.
“Leveraging these unprecedented successes for our brand remain critical as we continue to align our strategy to attack key growth categories and drive deeper connections with the athlete. Some of these powerful connections are already evident across our distribution, where we are investing in expanded relationships with our key sporting goods and mall partners, as well as supporting our own direct-to-consumer capabilities including new Brand House openings across both the US and our international markets.”
He continued, “It also means continuing to build one of our key foundations for future growth with Connected Fitness. With our Connected Fitness community now totaling more than 140 million unique registered users and adding on average more than 100,000 new athletes each day, we are pleased with our progress and believe we are still in the early stages of uncovering the potential of what the world’s largest digital health and fitness community can do to build consumer engagement and drive healthier lifestyles.”
Updated 2015 outlook
The Company had previously anticipated 2015 net revenues of approximately US$3.78 billion, representing growth of 23% over 2014, and 2015 operating income in the range of US$400 million to US$408 million, representing growth of 13% to 15% over 2014.
Based on ‘current visibility’, the company expects 2015 net revenues of approximately US$3.84 billion, representing growth of 25% over 2014 and 2015 operating income in the range of US$405 million to US$408 million, representing growth of 14% to 15% over 2014.
The 2015 guidance continues to reflect the ‘net dilutive impact from the Connected Fitness acquisitions, as well as the impact of the strong dollar negatively impacting our operating margin within our international businesses.’
Brad Dickerson, COO/CFO of Under Armour said, “The ongoing strength of our brand and execution of our business plan give us confidence in raising our full year top line outlook. In addition, the confluence of our sports marketing success stories has provided a unique opportunity to drive investment toward areas that we see are key to long-term sustainable growth and we plan to take advantage of this dynamic in the back half of 2015.
“At the same time, we are increasing our focus on developing sustainable business process improvements and better connecting the components of our value chain to more fully capitalize on our brand’s momentum each season going forward.”
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