Under Armour first quarter earnings up on Internet, apparel sales

Footwear sales down as expected, but company raises outlook for year

April 27, 2010|By Andrea K. Walker, The Baltimore Sun

Sports apparel company Under Armour Inc. posted substantially higher profits and sales for its first quarter on Tuesday, crediting its efforts to increase direct sales to consumers.

The Baltimore company reported profit of $7.2 million for the quarter ending in March, up 81 percent from the same period in 2009. Earnings per share rose from 8 cents to 14 cents, surpassing the 10 cents predicted by analysts who follow Under Armour stock.

Quarterly revenue increased 15 percent to $229.4 million. Under Armour also raised its "guidance" on profit for the year to $1.05 to $1.07 per share, a 14 percent to 16 percent increase from the same period a year ago.

"We look at our results this quarter and we see continued steady progress," Kevin Plank, Under Armour CEO and chairman, told analysts in a call to discuss the financial results.

The company said apparel sales were up 31 percent during the quarter. Catalog and online sales increased 73 percent.

The company said that it is attracting a broader range of athlete. While it got its start in the tight-fitting "compression" line, two-thirds of the business now comes from other ,looser fits.

"While compression remains the focus for our brand and is still responsible for a large piece of our profitability, we understand that not every athlete needs or wants a compression brand," said David McCreight, Under Armour president.

The footwear line continued to struggle, with revenue dropping to $43 million in the quarter, compared with $56.9 million the same period the previous year. The company had previously said footwear sales would be down as it revamps its running and training shoes.

Under Armour plans to open 16 to 18 additional factory outlet stores this year and said it is testing out the brand in Bloomingdale's. It is also looking at expanding into new areas in the United States and driving more sales through the Internet.



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