US: Under Armour boosts Q1 income by 13.8%
Apparel and footwear maker Under Armour has reported that net income increased 13.8% to reach US$9.9m for the first quarter ended 31 March 2007.
Net revenues increased 41.8% in the quarter, at $124.3m, with apparel revenues growing 26.9% for the quarter and accounting for $22.0m of the increase.
The company said it was able to augment its apparel revenue growth with expanded assortments in key categories such as baseball and golf. Footwear, which was not offered in the first quarter of the prior year, contributed $11.8m in net revenues during the quarter.
"Our first quarter revenue growth of 42% reflects the growing strength of the Under Armour Brand," said Kevin Plank, chairman and CEO of Under Armour.
"Our core apparel business remains very strong, and we saw excellent consumer demand for new products as we expanded our offerings in key apparel categories. These strong results reflect our ability to balance our growth with investments in both our brand and the growth drivers that will fuel our long-term profitability."
Gross margin for the quarter was 48.7% compared to 50.5% in the prior year primarily due to the impact of footwear, which was launched in the second quarter of 2006. Marketing expense for the first quarter was 11.1% of net revenues compared to 8.6% in the prior year.
The company has previously stated its long-term growth targets of 20% to 25% for the top and bottom line, and reiterated its expectations for annual net revenues in the range of $560m to $580m, an increase of 30% to 35% over 2006.
"We believe Under Armour is the athletic brand of this generation. As our revenue base broadens, we're communicating performance benefits to new consumers while staying true to our year-round messaging to the elite athlete," Plank added.
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