- Prachi Singh |
Under Armour reported 28 percent jump in net revenues in the second quarter of 2016 to one billion dollars compared with net revenues of 784 million dollars in the prior year's period. However, net income decreased 58 percent to six million compared with 15 million dollars in the prior year's period.
“The strong broad-based results posted this quarter highlight the continued demand for the Under Armour brand around the world. 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,” said Kevin Plank, Chairman and CEO of Under Armour.
Detailed review of the Q2 performance
Operating income decreased 39 percent to 19 million dollars compared with 32 million dollars in the prior year's period. The company reported diluted loss per share of 0.12 dollar for Class A and B shares and diluted earnings per share of 0.15 dollar for Class C shares.
Wholesale net revenues grew 27 percent year-over-year to 635 million dollars compared to 501 million dollars in the prior year's period, while direct-to-consumer net revenues grew 28 percent to 321 million dollars compared to 251 million dollars in the prior year's period. North America net revenues grew 22 percent and international net revenues, which represented 15 percent of total net revenues for the second quarter, grew 68 percent year-over-year, or 72 percent on a currency neutral basis.
Within product categories, apparel net revenues increased 19 percent to 613 million dollars compared with 515 million dollars in the same period of the prior year, led by growth in men's training, women's training and golf. Footwear net revenues increased 58 percent to 243 million dollars from 154 million dollars in the prior year's period, 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 percent to 101 million dollars from 83 million dollars in the prior year's period, driven primarily by growth in bags and headwear.
In June 2016, the company paid a 59 million dollars stock dividend to the holders of Class C common stock in the form of approximately 1.47 million shares of Class C common stock and 2.9 million dollars of cash in lieu of fractional shares in connection with the shareholder litigation regarding the creation of Class C common stock.
Anticipates 24 percent revenue rise in FY16
Based on current visibility, the company expects 2016 net revenues of approximately 4.925 billion dollars, representing growth of 24 percent over 2015, and 2016 operating income in the range of 440 million dollars to 445 million dollars, representing growth of 8 percent to 9 percent over 2015.
“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. 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. 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," added Plank.