US: Under Armour Q1 income rises 27.5%
Performance apparel company Under Armour has posted net income of US$3.96m for the first quarter ended 31 March, compared to $2.87m in the prior year period, benefiting from an expanded footwear range in the US.
Net revenues increased 27.1% in the first quarter to $200.0m compared with the first quarter of 2008.
First quarter apparel net revenues increased 2.4% to $132.2m, while footwear sales increased $40.3m to $56.9m for the period.
The company attributed its growth in footwear to its entry into Running Footwear during the quarter as well as shipments of Performance Training Footwear, which launched in the second quarter of 2008.
For the first quarter, operating income rose 83.7% to $7.9m compared with prior year's period. Gross margin for the quarter was 45.3% compared with 47.6% in the prior year's quarter due to several factors including the higher proportion of lower gross margin footwear sales.
Selling, general and administrative expenses as a percentage of net revenues decreased to 41.3% in the first quarter of 2009 compared with 44.9% in the prior year's period. Inventory at quarter-end decreased 2.1% to $164.4m compared with $167.9m on 31 March 2008.
Marketing expense for the first quarter of 2009 was 16.5% of net revenues versus 17.8% in the prior year's period. The company still expects to invest in marketing at the high-end of the range of 12% to 13% of net revenues for the full year, it said.
Kevin Plank, chairman and CEO of Under Armour, said: "The athletic footwear market represents an enormous growth opportunity for the Under Armour Brand. With each new category we enter, our ultimate goal is to build momentum by developing innovative footwear technology, generating support from our key retail partners, and delivering product to our core consumer that drives our credibility as a performance footwear brand.
"Our success with previous categories laid the groundwork for our most recent advancement - our entry into Running Footwear - and our performance in Running has paved the way to establish Under Armour as a major player in the athletic footwear market over the long-term."
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