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Under Armour Reports First Quarter Net Revenues Growth Of 30%; RAISES FULL YEAR NET REVENUES OUTLOOK TO $5.0 BILLION

The following excerpt is from the company's SEC filing.

First Quarter Net Revenues Increased 30% to $1.05 Billion

First Quarter Operating Income Increased 26% to $35 Million

First Quarter Diluted EPS Increased 62% to $0.04, Reflective of the Company's Class C Stock Dividend

Raises 2016 Net Revenues Outlook to Approximately $5.0 Billion (+26%)

Raises 2016 Operating Income Outlook to a Range of $503 Million to $507 Million (+23% to 24%)

Baltimore, MD (April 21, 2016) - Under Armour, Inc. (NYSE: UA, UA.C)

today announced financial results for the

first quarter

ended

March 31, 2016

. Net revenues in creased 30% in the

to $1.05 billion compared with net revenues of

$805 million

in the prior year's period. On a currency neutral basis, net revenues increased 32% compared with the prior year's period. Operating income increased 26% in the first quarter of 2016 to

$35 million

$28 million

in the prior year's period. Net income increased 63% in the

$19 million

$12 million

in the prior year's period and diluted earnings per share for the

were

per share in the prior year's period. Diluted earnings per share calculations for both periods reflect the Company's Class C Stock Dividend effective April 7, 2016, which has the same effect as a two-for-one stock split.

During the first quarter, wholesale net revenues grew 28% year-over-year to $744 million compared to $579 million in the prior year's period, while Direct-to-Consumer net revenues grew 33% year-over-year to $266 million compared to $200 million in the prior year's period. North America net revenues for the first quarter grew 26% year-over-year, or 27% on a currency neutral basis. International net revenues, which represented 14% of total net revenues for the first quarter, grew 56% year-over-year, or 65% on a currency neutral basis.

Within product categories, apparel net revenues increased 20% to

$667 million

$555 million

in the same period of the prior year, led by growth in training and golf. Footwear net revenues increased 64% to

$264 million

$161 million

in the prior year's period, primarily reflecting the ongoing success of the Curry signature basketball line and expanded running offerings. Accessories net revenues increased 26% to

$80 million

$63 million

in the prior year's period, driven primarily by growth in headwear and bags.

Kevin Plank, Chairman and CEO of Under Armour, Inc., stated, "For the past 24 consecutive quarters or six years, we have driven net revenue growth above 20% and we are incredibly proud of our start to 2016 with first quarter net revenue growth of 30%. The strong results posted this quarter truly demonstrate the balanced growth of our brand across product categories, channels and geographies. It also showcases our heightened focus on providing better service across our distribution channels, ensuring that our consumer consistently finds the newest, most premium product from

us wherever they shop. In footwear, this includes the remarkable success of the Stephen Curry signature basketball line, as well as the exciting launches of our first smart running shoe and our new line of Jordan Spieth inspired golf shoes. Combined with the introductions of premium apparel technologies like Microthread and CoolSwitch, we will continue to drive elevated innovation and excitement to the athlete throughout the remainder of 2016."

Gross margin for the

in the prior year's period, primarily reflecting negative impacts of approximately 100 basis points from higher liquidations and approximately 70 basis points from foreign currency exchange rates, partially offset by approximately 60 basis points from improved product cost margins. Selling, general and administrative expenses grew 27% to $446 million compared with $350 million in the prior year's period, primarily driven by investments in Direct-to-Consumer and overall headcount to support the Company's strategic initiatives.

Balance Sheet Highlights

Cash and cash equivalents decreased 30% to

$157 million

compared with $225 million at

March 31, 2015

. Inventory at

increased 44% to

$834 million

compared with $578 million at

, primarily driven by the Company's ongoing strategy to drive higher service levels to customers, resulting in meaningful improvements in fill rates. Total debt increased 38% to

$935 million

compared with $677 million at

Updated 2016 Outlook

Based on current visibility, the Company expects 2016 net revenues of approximately $5.0 billion, representing growth of 26% over 2015 and 2016 operating income in the range of $503 million to $507 million, representing growth of 23% to 24% over 2015. Below the operating line, the Company expects interest expense of approximately $35 million, an effective full year tax rate of approximately 38.5%, and fully diluted weighted average shares outstanding of approximately 446 million for 2016 reflective of the Class C Stock Dividend.

Mr. Plank concluded, "This year marks our 20th year in business, which is a great milestone for our company. Our robust growth this quarter demonstrates the power of our brand with growth coming from every part of our business. Our ability to adapt in a rapidly changing environment has been a critical part of our success and fuels our inspiration to create game-changing products that solve problems and enrich consumers' lives. With this unrelenting consumer focus and ongoing investment, we are setting the foundation for our growth story over the next 20 years."

Conference Call and Webcast

The Company will provide additional commentary regarding its

as well as its updated 2016 outlook during its earnings conference call today, April 21, at 8:30 a.m. ET. The call will be webcast live at

http://investor.underarmour.com/events.cfm

and will be archived and available for replay approximately three hours after the live event. Additional supporting materials related to the call will also be available at

. The Company's financial results are also available online at

http://investor.underarmour.com/results.cfm

Non-GAAP Financial Information

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). However, this press release refers to certain “currency neutral” financial information, which is a non-GAAP financial measure. The Company provides a reconciliation of this non-GAAP measure to the most directly comparable financial measure calculated in accordance with GAAP. See the end of this press release for this reconciliation.

Currency neutral financial information is calculated to exclude foreign exchange impact. Management believes this information is useful to investors to facilitate a comparison of the Company's results of operations period-over-period. This non-GAAP financial measure should not be considered in isolation and should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP. In addition, the Company's non-GAAP financial information may not be comparable to similarly titled measures reported by other companies.

About Under Armour, Inc.

Under Armour (NYSE: UA, UA.C), the originator of performance footwear, apparel and equipment, revolutionized how athletes across the world dress. Designed to make all athletes better, the brand's innovative products are sold worldwide to athletes at all levels. The Under Armour Connected Fitness™ platform powers the world’s largest digital health and fitness community through a suite of applications: UA Record, MapMyFitness, Endomondo and MyFitnessPal. The Under Armour global headquarters is in Baltimore, Maryland. For further information, please visit the Company's website at

www.uabiz.com

Forward Looking Statements

Some of the statements contained in this press release constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, such as statements regarding our future financial condition or results of operations, our prospects and strategies for future growth, the development and introduction of new product, the implementation of our marketing and branding strategies, and the future benefits and opportunities from acquisitions. In many cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “outlook,” “potential” or the negative of these terms or other comparable terminology. The forward-looking statements contained in this press release reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause events or our actual activities or results to differ significantly from those expressed in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements, including, but not limited to: changes in general economic or market conditions that could affect consumer spending; the financial health of our customers; our ability to effectively manage our growth and a more complex global business; our ability to successfully manage or realize expected results from acquisitions and other significant investments or capital expenditures; our ability to effectively develop and launch new, innovative and updated products; our ability to accurately forecast consumer demand for our products and manage our inventory in response to changing demands; increased competition causing us to lose market share or reduce the prices of our products or to increase significantly our marketing efforts; fluctuations in the costs of our products; loss of key suppliers or manufacturers or failure of our suppliers or manufacturers to produce or deliver our products in a timely or cost-effective manner, including due to port disruptions; our ability to further expand our business globally and to drive brand awareness and consumer acceptance of our products in other countries; our ability to accurately anticipate and respond to seasonal or quarterly fluctuations in our operating results; risks related to foreign currency exchange rate fluctuations; our ability to effectively market and maintain a positive brand image; our ability to comply with trade and other regulations; the availability, integration and effective operation of information systems and other technology, as well as any potential interruption in such systems or technology; risks related to data security or privacy breaches; our ability to raise additional capital required to grow our business on terms acceptable to us; our potential exposure to litigation and other proceedings; and our ability to attract and retain the services of our senior management and key employees. The forward-looking statements contained in this press release reflect our views and assumptions only as of the date of this press release. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

(Tables Follow)

Quarter Ended

(Unaudited; in thousands, except per share amounts)

CONSOLIDATED STATEMENTS OF INCOME

Quarter Ended March 31,

% of Net

1,047,702

804,941

Cost of goods sold

567,066

427,277

Gross profit

480,636

377,664

445,753

349,997

Income from operations

34,883

27,667

Interest expense, net

(4,532

(2,210

Other income (expense), net

(1,840

Income before income taxes

33,053

23,617

Provision for income taxes

13,873

11,889

19,180

11,728

Net income available per common share

Weighted average common shares outstanding

433,626

429,394

443,260

439,232

(Unaudited; in thousands)

NET REVENUES BY PRODUCT CATEGORY

% Change

Apparel

666,571

555,455

264,246

160,966

79,701

63,151

Total net sales

1,010,518

779,572

Licensing revenues

19,433

16,938

18,501

Intersegment eliminations

(100.0

Total net revenues

NET REVENUES BY SEGMENT

880,595

700,512

149,356

95,998

OPERATING INCOME (LOSS) BY SEGMENT

40,095

38,369

11,249

(16,461

(15,036

As of

December 31, 2015

CONDENSED CONSOLIDATED BALANCE SHEETS

3/31/16

3/31/15

Assets

157,001

129,852

224,927

Accounts receivable, net

566,286

433,638

395,917

Inventories

834,287

783,031

577,947

Prepaid expenses and other current assets

211,209

152,242

169,722

Deferred income taxes

65,966

Total current assets

1,768,783

1,498,763

1,434,479

Property and equipment, net

601,910

538,531

359,489

Goodwill

588,895

585,181

595,492

Intangible assets, net

73,217

75,686

87,075

92,230

92,157

14,104

Other long term assets

93,089

78,582

57,415

Total assets

3,218,124

2,868,900

2,548,054

Liabilities and Stockholders’ Equity

Revolving credit facility, current

140,000

Accounts payable

184,243

200,460

252,051

Accrued expenses

224,076

192,935

137,482

Current maturities of long term debt

27,000

42,000

43,347

Other current liabilities

30,581

43,415

15,339

Total current liabilities

605,900

478,810

448,219

Long term debt, net of current maturities

217,525

352,000

383,500

Revolving credit facility, long term

550,000

275,000

250,000

Other long term liabilities

103,382

94,868

81,809

Total liabilities

1,476,807

1,200,678

1,163,528

Total stockholders’ equity

1,741,317

1,668,222

1,384,526

Total liabilities and stockholders’ equity

CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash flows from operating activities

Adjustments to reconcile net income to net cash used in operating activities

Depreciation and amortization

32,021

21,308

Unrealized foreign currency exchange rate (gains) losses

(11,009

21,416

Loss on disposal of property and equipment

Stock-based compensation

14,403

Changes in reserves and allowances

12,657

Changes in operating assets and liabilities, net of effects of acquisitions:

(136,990

(127,439

(45,958

(50,303

Prepaid expenses and other assets

(15,351

(39,899

40,066

Accrued expenses and other liabilities

(14,264

Income taxes payable and receivable

(47,748

(58,250

Net cash used in operating activities

(168,036

(176,526

Cash flows from investing activities

Purchases of property and equipment

(104,573

(68,619

Purchase of businesses, net of cash acquired

(539,109

Purchases of available-for-sale securities

(19,997

(10,424

Sales of available-for-sale securities

21,414

Purchases of other assets

(2,494

Net cash used in investing activities

(103,156

(617,335

Cash flows from financing activities

Proceeds from revolving credit facility

415,000

Proceeds from term loan

150,000

Payments on term loan

(145,000

Payments on long term debt

(7,355

Excess tax benefits from stock-based compensation arrangements

27,058

34,613

Proceeds from exercise of stock options and other stock issuances

Payments of debt financing costs

(1,258

Net cash provided by financing activities

299,254

429,234

Effect of exchange rate changes on cash and cash equivalents

(3,621

Net increase (decrease) in cash and cash equivalents

27,149

(368,248

Beginning of period

593,175

End of period

Non-cash investing activities

Decrease in accrual for property and equipment

(13,814

Property and equipment acquired under build-to-suit leases

(Unaudited)

The table below presents the reconciliation of non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP. See "Non-GAAP Financial Information" above for further information regarding the Company's use of non-GAAP financial measures.

CURRENCY NEUTRAL NET REVENUE GROWTH RECONCILIATION

Total Net Revenue

Currency neutral net revenue growth - Non-GAAP

Foreign exchange impact

Net revenue growth - GAAP

BRAND HOUSE AND FACTORY HOUSE DOOR COUNT

As of March 31,

Factory House

Brand House

North America total doors

International total doors

Total doors

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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