Basketball Footwear Drives Under Armour Results

Under Armour, announced financial results for the fourth quarter ended December 31, 2015.  Net revenues increased 31% in the fourth quarter of 2015 to $1.17 billion compared with net revenues of $895 million in the prior year’s period.  On a currency neutral basis, net revenues increased 33% compared with the prior year’s period.  Operating income increased 21% in the fourth quarter of 2015 to $178 million compared with $146 million in the prior year’s period.  Net income increased 21% in the fourth quarter of 2015 to $106 million compared with $88 million in the prior year’s period and diluted earnings per share for the fourth quarter of 2015 were $0.48 compared with $0.40 per share in the prior year’s period.

Fourth quarter apparel net revenues increased 22% to $865 million compared with $708 million in the same period of the prior year, led by growth in training, running, golf and basketball.  Fourth quarter footwear net revenues increased 95% to $167 million from $86 million in the prior year’s period, primarily reflecting the success of the Curry signature basketball line and expanded running offerings.

Fourth quarter accessories net revenues increased 23% to $97 million from $79 million in the prior year’s period, driven primarily by new introductions across the bags category.  Direct-to-Consumer net revenues, which represented 36% of total net revenues for the fourth quarter, grew 25% year-over-year.  International net revenues, which represented 12% of total net revenues for the fourth quarter, grew 70% year-over-year, or 85% on a currency neutral basis.

Kevin Plank, Chairman and CEO of Under Armour, Inc., stated, «Our core business remains incredibly strong and our 31% net revenue growth in the fourth quarter is clear evidence of the continued expansion in the breadth and depth of our Brand.  We delivered our 25th consecutive quarter of more than 20% net revenues growth in our largest product category of apparel. Moreover, we continued to diversify our product offering and geographic reach, driving significant market share gains in key strategic areas like basketball footwear, while better meeting the needs of the global athlete with investments in our global Brand House stores and e-commerce sites helping drive 70% growth in international.  With our continued investments across people, systems, and digital, we are confident in our ability to build upon this tremendous momentum, reinforcing our belief that we are just getting started in becoming the next great global brand.»

Gross margin for the fourth quarter of 2015 was 48.0% compared with 49.9% in the prior year’s period, primarily reflecting negative impacts of approximately 90 basis points from sales mix, specifically from strong footwear growth, approximately 80 basis points from the continued strength of the U.S. Dollar, and approximately 30 basis points from higher liquidations.  Selling, general and administrative expenses as a percentage of net revenues were 32.8% in the fourth quarter of 2015 compared with 33.6% in the prior year’s period, primarily reflecting the planned timing of marketing expenses and lower incentive compensation expenses.