Under Armour Encouraged As Q2 Results Surpass Predictions
Under Armour (UA) for its Q2 posted a 75% decline in profits from the year-ago period, but the drop was "less than analysts predicted, and revenue rose 30[%]," thanks to successful sales" of the company's New Prototype cross-trainer shoe, which was released on May 3, according to Andrea Walker of the Baltimore SUN. UA "took a calculated gamble earlier this year, spending millions to promote" the New Prototype, and it seems to be "paying off." UA sold through "almost a third of available inventory of the shoe in four weeks." UA's earned $1.4M, or $0.03 per share, in net income for the quarter, down from $5.7M ($0.11 per share) in the year-ago period. UA posted $156.7M in revenue for Q2, up from $120.5M last year. With the launch of the New Prototype, shoes represented a "much larger part of [UA's] product mix," as footwear was 29% of total revenue for the quarter, up from 17% last year. UA Chair & CEO Kevin Plank: "These are strong numbers that any brand in our space would be happy reporting." Walker notes marketing expenses represented 14.4% of Q2 revenue, compared to 13.5% in the year-ago period, but UA yesterday said that marketing costs "will decline the rest of the year." Plank said that the "percentage of business already booked with its retail partners is similar to that at the same time last year." Additionally, direct-to-customer sales, including Internet and retail, are "growing faster than the rest of the business." The "better-than-expected earnings" yesterday boosted UA shares $1.77, or 6.7%, to close at $28.40 (Baltimore SUN, 7/30). At presstime, UA shares are trading at $30.51 up 7.43% from yesterday's close (THE DAILY).
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