Under Armour hailed "next global athletic company"
- Q1 net income down 13% to US$12m on acquisitions
- Net revenues up 25% to $805m
- Analyst says UA “next global athletic company”
Under Armour saw its revenues rise 25% during the quarter
Under Armour has been hailed by one analyst as "the next global athletic company" after the US company recorded its 20th consecutive quarter of 20%-plus revenue growth.
Revenues rose 25% in the first three months of 2015, but net income fell thanks to costs related to the recent acquisitions of Endomondo and MyFitnessPal.
Apparel revenues increased 21% thanks to new launches in baselayer and training, while footwear sales soared 41% on the back of more SpeedForm running offerings and the launch of the Curry One basketball shoe.
Accessories sales increased 23% and direct-to-consumer revenues were up 21%, while international sales recorded a 74% surge.
Gross margin was flat at 46.9%, the company said.
The results prompted Under Armour to increase its 2015 guidance, predicting revenues of up to $3.78bn and operating income of $400-408m.
Analyst FBR & Co said of the company: "We continue to be highly encouraged by UA’s growth trajectory as it earns its status as the next global athletic company."
However, UBS Investment Bank's Michael Binetti believes Under Armour's story is getting more complex. "While its top line story remains firmly intact, UA announced that it will step-up capex by $50m this year to start building a global SAP platform to support its rapidly broadening revenue initiatives.
"Adding further complexity, UA will have to articulate to investors how it plans to monetise its recent $700m+ investments in Connected Fitness, and update details on the path to profitability for its fast growing international business, which has differing business and profitability structures by market."
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