Under Armour yesterday posted its "first quarterly loss since going public" in '05, as North American sales "slumped in a sluggish retail environment," according to Ryan Sharrow of the BALTIMORE BUSINESS JOURNAL. UA posted a Q1 loss of $2.3M, or 2 cents per share, compared with a profit of $19.2M, or 4 cents per share, in the year-ago period. Sharrow notes the loss was "still better than Wall Street estimates." Analysts polled by Thomson Financial Network "expected the company to lose 4 cents per share on revenue" of $1.11B. UA's Q1 revenue did rise 7% to $1.1B, up from $1.04B a year before, "driven by an increase in its wholesale business." But North American revenue, a "key driver for the company," declined 1% as new distribution was "more than offset by the bankruptcies of several retail partners, like Sports Authority." International revenue represented 20% of total revenue in Q1, and was up 52% (BIZJOURNALS.com, 4/27). In Baltimore, Lorraine Mirabella notes UA "maintained its outlook for the year, with annual sales expected to grow" 11-12% to nearly $5.4B. UA had previously "lowered its outlook to that range" from the low 20% range (BALTIMORESUN.com, 4/27). The WALL STREET JOURNAL's Anne Steele notes UA has "been enjoying hot demand for its apparel and has used sponsorships with high-profile athletes" such as Warriors G Stephen Curry and Patriots QB Tom Brady to "invigorate a brand" with $4.8B in annual revenue. But after its "rapid ascent from college locker rooms to mass retailers, the company is contending with a shift away from performance equipment, fewer visits to retail stores and increased competition from new players in the athletic-apparel market" (WSJ.com, 4/27).
GAME OF THRONES: The WALL STREET JOURNAL's Sara Germano cited new research that shows Under Armour is selling many items at "multiple retailers, a level of overlap that could push prices lower and confuse shoppers in an already competitive market." Credit Suisse analysts tracked UA men’s footwear products "available on its own website, as well as those sold online" by Dick’s Sporting Goods, Foot Locker and Kohl’s. In data collected during the last week of March, researchers "found more than 1,000 products available on at least two of those sites." According to their findings, UnderArmour.com was "selling 268 products also found on DicksSportingGoods.com and 165 on FootLocker.com" (WSJ.com, 4/26). BARRON's Avi Salzman noted Dick's "launched a line of sports apparel called Second Skin last week." The new brand "sells tight 'compression apparel' for athletes and wannabes, the kind of gear that consumers usually associate with Under Armour." And Dick’s is "stressing that it’s selling this 'at more desirable price points.'” The problem for UA is that it "depends heavily on Dick’s to sell its goods," but now Dick's "appears to be a competitor." Dick's can now "sell a cheaper compression shirt on a rack right next to Under Armour’s shirts" (BARRONS.com, 4/26). At presstime, shares of UA were trading at $19.69, up 8.57% from the close of business yesterday (THE DAILY).
