Under Armour has announced financial results for the third quarter ended 30 September 2016. Net revenues increased 22% in the third quarter of 2016 to US$1.47 billion, compared with net revenues of $1.20 billion in the prior year period. On a currency neutral basis, net revenues increased 23% year on year.
Operating income increased 16% in Q3 2016 to U$199 million. Net income increased 28% to US$128 million compared and diluted earnings per share for the third quarter of 2016 were US$0.29 compared with US$0.23 in the prior year period.
During the third quarter, wholesale net revenues grew 19% year-over-year to US$1.01 billion, while direct-to-consumer net revenues grew 29% to US$408 million. North America net revenues for the third quarter grew 16% year-over-year. International net revenues, which represented 15% of total net revenues for the third quarter, grew 74% year-over-year, or 80% on a currency neutral basis.
Within product categories, apparel net revenues increased 18% to US$1.02 billion, led by growth in men’s training, women’s training, golf and team sports. Footwear net revenues increased 42% to US$279 million, driven by strong growth in running and basketball. Accessories net revenues increased 18% to US$122 million from US$104 million in the prior year period, driven primarily by growth in bags and headwear.
Kevin Plank, Chairman and CEO of Under Armour said, “Under Armour is a growth company and our ambitions for the brand have never been higher. This marks our 26th consecutive quarter of 20+% revenue growth demonstrating the strength of the Under Armour brand. From the Olympic Games in Rio to the launch of Under Armour Sportswear at New York Fashion Week, the Under Armour Brand continues to extend its reach to new consumers while remaining authentic and rooted in sport.
“In the third quarter, our key strategies and investments to diversify our portfolio on a global scale were evident across categories, channels, and geographies. In running, we experienced strong global demand for our Slingride and Bandit 2 footwear styles, showcasing the continued expansion of our premium $100+ footwear offerings.
“Within direct-to-consumer we launched three new e-commerce sites, bringing our total to 30 global sites, as we focus on expanding brand experience and premium offerings for consumers wherever they shop. And finally, we hosted our second tour through Asia, where the brand continues to resonate and drive incredible momentum in new markets.”
Gross margin for the third quarter of 2016 was 47.5% compared with 48.8% in the prior year period, primarily reflecting negative impacts from the timing of liquidation, increased promotions, and foreign exchange rates, partially offset by continued product cost margin improvements. Selling, general and administrative expenses grew 20% to US$499 million compared with US$416 million in the prior year’s period primarily driven by ‘investments in direct-to-consumer and overall headcount to support the company’s strategic initiatives’.
