US: Under Armour raises FY outlook on footwear sales
Even though lower margins and higher marketing costs have pushed Under Armour Inc to a 75.4% drop in second quarter profit, the performance apparel and footwear maker has raised its outlook for the year.
The company, headquartered in Baltimore, Maryland, said second quarter net income fell to $1.4m or $0.03 per share, from $5.7m or $0.11 per share in the same period last year.
But quarterly net revenues increased 30.0% to $156.7m from $120.5m last time, helped by earlier apparel shipments to some customers and the launch of its performance training footwear line in May.
Apparel sales rose 10.3% to $96.2m, and footwear revenues soared 128.8% to $46.0m.
Gross margin fell to 45.3% from 49.0%, mainly due to the higher proportion of footwear sales in the quarter, which have lower gross margins than apparel.
Marketing expenses rose to 14.4% of revenue from 13.5% in the prior year, the company said.
In its outlook for 2008, Under Armour said it continues to expect a 26% to 28% rise in annual revenues to $765m to $775m.
But it is raising its projection for income from operations to $104.5m to $105.5m, an increase of 21% to 22% over 2007 and up from earlier estimates of $103.5m to $104.5m.
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