Under Armour’s sales beat estimates
Under Armour reported sales of $784 million in 2Q15, up 28.5% over 2Q14. Revenue also beat consensus Wall Street analyst estimates of $762 million. 2Q15 marked the 26th straight quarter of the company exceeding revenue guidance. It was also the 21st consecutive quarter that the company posted a revenue growth rate of over 20%.
Under Armour also raised its outlook for full-year revenue to $3.84 billion from the $3.78 billion that it provided at the first quarter’s earnings release. This implies a growth rate of 25% over 2014. This is the second time Under Armour has raised its revenue outlook for 2015.
- Lululemon Athletica (LULU), also primarily an apparel player, reported sales growth of 10.1% in 1Q16[1. The quarter ended May 3, 2015, for the fiscal year ended January 31, 2016]. LULU also raised its revenue guidance for the remainder of fiscal 2016.
- G-III Apparel Group (GIII) another peer, reported sales growth of 18% in 1Q16. GIII also raised its full-year sales guidance to $2.4 billion from the $2.37 billion provided earlier.
- Sales for Nike (NKE), the number-one sportswear company, grew (RPG) 10.1% year-over-year to $30.6 billion in fiscal 2015.
Under Armour’s footwear, direct-to-consumer (XLY)(FXD), and international sales have been growing far ahead of the company’s overall growth rate. The company’s future plans involve executing strategies related to these and other key growth drivers.
According to Under Armour’s CFO and COO, Brad Dickerson, the company anticipates higher spending on marketing in the remainder of the year, resulting in higher projected upside to its top line. “We have long stated that we would be opportunistic with our investment levels if and when the right situations present themselves. In a period where we have seen unprecedented success from our athletes on a global stage we believe we have a unique opportunity to position ourselves more aggressively in key long-term growth categories such as basketball and golf which we believe can create brand hallows across the Under Armour portfolio,” said Dickerson at the company’s 2Q15 earnings call.
Read more on Under Armour’s updated 2015 guidance and its implications in Part 9 of this series.