Under Armour, Inc. reported revenues increased 35 percent in the fourth
quarter to $683 million compared with net revenues of $506 million in
the prior year's period. Net income increased 28 percent in the fourth
quarter of 2013 to $64 million, or 59 cents a share, compared with $50
million, 47 cents, in the prior year's period. Results topped Wall
Street's consensus estimate of 53 cents a share.
Fourth quarter
apparel net revenues increased 35 percent to $546 million compared with
$405 million in the same period of the prior year, primarily driven by
expanded Fleece offerings and new ColdGear Infrared products. Fourth
quarter footwear net revenues increased 24 percent to $55 million from
$45 million in the prior year's period, led by gains in running. Fourth
quarter accessories net revenues increased 52 percent to $65 million
from $43 million in the prior year's period, primarily driven by
headwear and gloves. Direct-to-Consumer net revenues, which represented
39 percent of total net revenues for the fourth quarter, grew 36
percent year-over-year.
Kevin Plank, chairman and CEO of Under
Armour, Inc., stated, "By any measure, 2013 was a banner year for the UA
Brand. We surpassed $2 billion in net revenues for the year, which
culminated with our 15th straight quarter of at least 20 percent total
growth. In addition, we completed our first acquisition, MapMyFitness,
opened our first two UA Brand House retail stores, and continued to make
key investments in our Women's, Footwear and International businesses
to drive long-term global growth. While we are proud of what we have
accomplished to date, we firmly believe we are just getting started and
that our performance in 2013 is indicative of the opportunity that lies
ahead for Under Armour."
Gross margin for the fourth quarter of
2013 was 51.3 percent compared with 50.3 percent in the prior year's
quarter, primarily driven by the strength of the Brand contributing to a
favorable sales mix. Selling, general and administrative expenses as a
percentage of net revenues were 36.9 percent in the fourth quarter of
2013 compared with 34.2 percent in the prior year's period, primarily
reflecting higher incentive compensation costs. Fourth quarter
operating income increased to $98 million compared with $82 million in
the prior year's period.
Review of Full Year Operating Results
For
the full year 2013, net revenues increased 27 percent to $2.33 billion
compared with $1.83 billion in the prior year and compared with the
Company's prior outlook of $2.26 billion. Diluted earnings per share
for 2013 increased 24 percent to $1.50 compared with $1.21 per share in
the prior year.
Apparel net revenues increased 27 percent to
$1.76 billion compared with $1.39 billion in the prior year, led by
elevated newness across product categories like HeatGear and Fleece as
well as innovation platforms including Storm, ColdGear Infrared and
Charged Cotton. Footwear net revenues increased 25 percent to $299
million during 2013 compared to $239 million in 2012, reflecting
expanded offerings in both the running and cleated businesses.
Accessories net revenues increased 30 percent to $216 million during
2013 compared to $166 million in 2012, primarily driven by headwear and
gloves. Direct-to-Consumer net revenues, which represented 30 percent
of total net revenues for the year compared to 29 percent in 2012, grew
33 percent over the prior year.
Gross margin for 2013 was 48.7
percent compared with 47.9 percent in 2012, primarily driven by
favorable sales mix and lower year-over-year North American apparel and
accessories product costs. Selling, general and administrative expenses
as a percentage of net revenues were 37.3 percent for 2013 compared
with 36.5 percent for 2012, primarily reflecting higher incentive
compensation costs, partially offset by the leveraging of marketing
expenses. Operating income grew 27 percent to $265 million in 2013
compared with $209 million in the prior year and compared with the
Company's prior outlook of $260 million.
Balance Sheet Highlights
Cash
and cash equivalents increased 2 percent to $347 million at December
31, 2013 compared with $342 million at December 31, 2012. Inventory at
December 31, 2013 increased 47 percent to $469 million compared with
$319 million at December 31, 2012. The Company had $100 million in debt
outstanding under its $300 million revolving credit facility at
December 31, 2013. The $150 million purchase of MapMyFitness in
December was funded using $50 million in cash and $100 million under the
revolving credit facility. Long-term debt, including current
maturities, decreased to $53 million at December 31, 2013 from $62
million at December 31, 2012.
Updated 2014 Outlook
Based
on current visibility, the Company expects 2014 net revenues in the
range of $2.84 billion to $2.87 billion, representing growth of 22
percent to 23 percent over 2013, and 2014 operating income in the range
of $326 million to $329 million, representing growth of 23 percent to 24
percent over 2013. The Company expects an effective tax rate of
approximately 39.0 percent for the full year, compared to an effective
tax rate of 37.8 percent for 2013. The Company anticipates fully
diluted weighted average shares outstanding of approximately 109 million
to 110 million for 2014.
Plank concluded, "We have tremendous
momentum across our business and we will leverage this strength to fuel
our global growth ambitions in 2014. To start, we have recently formed
partnerships with three sports programs with deep, proud heritages:
the University of Notre Dame, the U.S. Naval Academy, and the Colo Colo
futbol team in Chile. In addition, today from Grand Central Station in
New York City we are providing the first glimpse of our latest Global
Brand Holiday, 'This Is What Fast Feels Like,' featuring our
award-winning SpeedForm Apollo running shoe and our latest apparel
technology, ArmourVent. Our commitment to invest in these and other key
initiatives positions the Brand to better reach all athletes and
provide solutions to their 24/7 needs."
By press release
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