- Kristopher Fraser |
Under Armour has a new brand in the works. This fall, they will be launching a new brand called Under Armour Sportswear or UAS.
In the report about the second quarter results, Under Armour chief executive Kevin Plank revealed that the company will launch UAS this fall in an effort to court new consumers. This means they will be putting low-priced merchandise in middle market stores. According to Plank, the new merchandise will be sold at flagship stores in addition to wholesale and online.
This plan was unveiled as it was revealed that Under Armour's net income for the second quarter fell 58 percent to 6.34 million dollars, or one cent a diluted share. This is down from 14.8 million dollars or three cents just a year ago. The FactSet estimate was for four cents a share. The realized diluted loss for Class A and B shares was 12 cents diluted earnings of 15 cents for class C shares. The class C shareholders receive a 59 million dollar stock dividend. Remove the dividend and the market recognizes one cent share earnings figure.
Sports Authority's bankruptcy caused Under Armour to take a 23 million dollar hit. Net revenues for the three months ended June 30 increased 28 percent to 1.001 billion dollars from 784 million dollars last year, but this missed the FactSet estimate of 1.005 billion dollars.
Expenses grew 32 percent to 458 million dollars to last year's 347 million dollars. The increased spending was caused by investments in e-commerce and overall headcount growth.
Footwear net revenues increased 58 percent to 243 million dollars, thanks to Stephen Curry's basketball shoes.
Gross margin for the second quarter was 47.7 percent versus last year's 48.4 percent for the same period.
Going forward, Under Armour expects to 2016 revenues to be about 4.925 billion dollars, which represents 24 percent growth, and operating income in the range of 440 million to 445 million. The Capital IQ estimate is for 4.958 billion dollars in revenue.
photo via Under Armour website