Under Armour has announced financial results for the second quarter ended 30 June 2016. Net revenues increased 28% in the second quarter of 2016 to US$1 billion, compared with net revenues of US$784 million in the prior year period.
Operating income decreased 39% in the second quarter of 2016 to US$19 million, inclusive of a US$23 million impairment related to the liquidation of Sports Authority, compared with US$32 million in the prior year’s period.
Net income decreased 58% in the second quarter of 2016 to US$6 million compared with US$15 million in the prior year’s period.
For the second quarter of 2016, the company realized diluted loss per share of US$0.12 for Class A and B shares and diluted earnings per share of US$0.15 for Class C shares. This reflected the impact of a US$59 million stock dividend paid to Class C shareholders during the quarter.
If the Class C stock dividend had not been paid, non-GAAP diluted earnings per share for all classes for the second quarter would have been US$0.01 per share, inclusive of US$0.03 impact from the impairment related to the Sports Authority liquidation. This compares with diluted earnings per share of US$0.03 for all classes in the prior year period.
During the second quarter, wholesale net revenues grew 27% year-on-year to US$635 million compared to US$501 million in the prior year period, while Direct-to-Consumer net revenues grew 28% year-over-year to US$321 million compared to US$251 million in the prior year’s period.
North America net revenues for the second quarter grew 22% year-over-year. International net revenues, which represented 15% of total net revenues for the second quarter, grew 68% year-on-year, or 72% on a currency neutral basis.
Within product categories, apparel net revenues increased 19% to US$613 million, led by growth in men’s training, women’s training and golf. Footwear net revenues increased 58% to US$243 million, 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% to US$101 million, driven primarily by growth in bags and headwear.
Kevin Plank, Chairman and CEO of Under Armour, said, “The strong broad-based results posted this quarter highlight the continued demand for the Under Armour brand around the world. 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 drivers. With the opening of 60 new international Under Armour stores so far this year, including doors on two new continents this quarter, our international business continues to expand and to resonate with the global athlete.”
Plank concluded, “In 2016, our ability to position the brand to capture the changing expectations of the consumer requires Under Armour to extend and grow in new and different ways. The authenticity we have gained with the athlete over the past 20 years has positioned Under Armour to widen our access through categories, channels, and geographies.
“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.
“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.”
