By Barry Janoff
July 23, 2015: Stating that it has seen "historic performances and accolades from our incredible portfolio of athletes," Under Armour continued its assault on the landscape once dominated by Nike and adidas with increased revenue and its strategy to "build consumer engagement and drive healthier lifestyles."
The apparel and footwear company Thursday (July 23) unveiled second-quarter financial figures that included a 29% increase in net revenue to $784 million, apparel net revenues that increased 23% to $515 million and footwear net revenues that rose 40% to $154 million, the latter "primarily reflecting continued product expansion across the running category and ongoing excitement around Stephen Curry signature product."
"More than ever before, this year has highlighted that the right investments are key to not only driving near-term results, but building the foundation for the unlimited potential of the Under Armour brand," Kevin Plank, chairman and CEO for Baltimore-based Under Armour, said during a conference call with analysts and media.
Nike is No. 1 in category retail sales in the U.S., but Under Armour last year passed adidas for the No. 2 spot, according to industry analysts. In 2014, Under Armour's sales rose 30% and for the first time topped $3 billion.
"In the second quarter of 2015, we witnessed historic performances and accolades from our incredible portfolio of athletes, including the NBA's MVP and (Golden State Warriors) world champion Stephen Curry; PGA Tour pro Jordan Spieth who won this year's Masters and U.S. Open; and the American Ballet Theatre's first-ever African American female principal dancer, Misty Copeland," said Plank.
Also helping to drive sales: Under Armour's "Connected Fitness," a tech-driven platform (including such interactive and wearable apps as MapMyFitness, Record, Endomonto and MyFitnessPal) which the company said "provides the technology needed to help (people) train, perform and improve."
Connected Fitness includes more than 140 million unique registered users and is adding "on average more than 100,000 new athletes each day," per Under Armour.
"We are pleased with our progress and believe we are still in the early stages of uncovering the potential of what the world's largest digital health and fitness community can do to build consumer engagement and drive healthier lifestyles," said Plank.
Stephen Curry's signature line, the first for Under Armour in the hoops category, was unveiled with multi-media marketing, supported by Curry's presence in the NBA All-Star Game in February and subsequent national attention as league MVP and record-setting point guard for the NBA champion Warriors.
His brother, Seth Curry, who just signed a deal with the Sacramento Kings, also wears Under Armour basketball shoes.
In addition, Under Armour's roster of pro athletes includes MLB players Bryce Harper, Buster Posey, Zack Greinke, Joc Pederson, Lorenzo Cain and Todd Frazier; NFL players Tom Brady, Brandon Marshall, Eddie Lac, Julio Jones and Patrick Peterson; world-class runner Frezer Legesse Miller; and MMA fighter Elias Silverio.
Under its "I Will What I Want" mantra, Under Armour this month released a multi-media campaign for its burgeoning women's division featuring its "Women of Will": Copeland, Gisele Bündchen, Lindsey Vonn, pro surfer Brianna Cope and Kelley O'Hara of the World Cup champion U.S. Women's National Soccer Team.
Among other financial figures, Under Armour said that direct-to-consumer net revenues, which represented 32% of total net revenues for the second quarter, grew 33% year-over-year; and that international net revenues, which represented 11% of total net revenues for the second quarter, grew 93% year-over-year.
"Leveraging these unprecedented successes for our brand remain critical as we continue to align our strategy to attack key growth categories."
According to Brad Dickerson, COO/CFO for Under Armour, "The ongoing strength of our brand and execution of our business plan give us confidence in raising our full year top line outlook. In addition, the confluence of our sports marketing success stories has provided a unique opportunity to drive investment toward areas that we see are key to long-term sustainable growth and we plan to take advantage of this dynamic in the back half of 2015.
"At the same time, we are increasing our focus on developing sustainable business process improvements and better connecting the components of our value chain to more fully capitalize on our Brand's momentum each season going forward," said Dickerson.
"Leveraging these unprecedented successes for our brand remain critical as we continue to align our strategy to attack key growth categories and drive deeper connections with the athlete," said Plank. "Some of these powerful connections are already evident across our distribution, where we are investing in expanded relationships with our key sporting goods and mall partners, as well as supporting our own direct-to-consumer capabilities including new brand house openings across both the U.S. and our international markets."
Under Armour said it would discuss "these initiatives and our longer-term business plan in greater detail" during its Investor Day, scheduled for Sept. 16.
Under Armour Effort Teams Vonn, Copeland, Bündchen, O'Hara
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