Under Armour raises year-end revenue forecast
US sports brand Under Armour has updated its net revenue expectation for 2011 to range from $1.46 billion to $1.47 billion, up 37% to 38% over 2010. Previously, the company had estimated annual revenues in the range of $1.42 billion to $1.44 billion.
“We’re seeing great success in our two-fold strategy of innovating to drive better performance product with higher prices in our core while expanding our reach beyond our core with new products,” President and CEO Kevin Plank told investors during a conference call.
Estimates of operating income for this year now range from $159 million to $162 million, up 42% to 44% over last year and higher than earlier predictions, which had ranged from $155 million to $160 million.
Net profits increased 42% to $466 million in the three months that ended September 30, compared with $329 million during the same period last year. Net income rose to $45.9 million, up from $34.8 million.
Under Armour’s gross margins continued to drop in the third quarter, to 48.4%, down more than two percentage points from this time last year.
The company reported that revenue from apparel sales increased by nearly a third, to $363 million in the third quarter, compared with $277 million in the year-earlier period. It was the fourth consecutive quarter with increases that high, Mr Plank said.
Footwear sales for the quarter were $52 million, twice as high as in the similar period in 2010. Under Armour surpassed total 2010 sales by September, which, Mr Plank said, gives the company confidence that its footwear is “resonating with customers”.
“We're certainly not declaring victory, but we're encouraged by what we're seeing,” he said.
