Under Armour’s revenue performance in 2015
Growth stock (VUG) (IWF) Under Armour (UA) had one of its best years ever in 2015. Its net revenue continued on its upward trajectory, growing by 28.5% year-over-year to $3.96 billion. In currency-neutral terms, revenue was up by 31%.
Under Armour beat its own previously announced guidance number of $3.91 million. The company’s owned store count increased by 45 during 2015. Direct-to-consumer sales now account for 30% of UA’s sales.
In contrast, the Gap’s (GPS) Athleta format stores, which also compete in the activewear category, saw a net increase of 120 doors in the last fiscal year, which ended January 30, 2016.
Under Armour’s (UA) results were boosted by another strong showing in its apparel product sales, which grew by over 20% year-over-year for the 25th straight quarter. Footwear sales rose by 95% in 4Q15 to $165 million.
UA’s 2015 EPS (earnings per share) came in at $1.05, up by 10.5% year-over-year. The company’s 2015 EPS included a $0.10 impact resulting from its Connected Fitness acquisitions in 2015.
In addition to the strong financial showing, Under Armour has an impressive roster of athletes that wear the company’s gear:
- Steph Curry: Golden State Warriors, point guard
- Buster Posey: San Francisco Giants, catcher
- Cam Newton: Carolina Panthers, quarterback
- Jermaine Jones: US Men’s National Soccer Team, midfielder
- Gary Woodland: Pro golfer
- Misty Copeland: American Ballet Theatre, principle dancer
These top-ranked athletes were among the stars who continued to dominate in their respective fields. The branding benefit derived from these athletic stars wearing UA gear has benefited the company’s sales over the year, particularly in categories like basketball and golf.
UA’s Class C shares
Under Armour’s (UA) CEO, Kevin Plank, noted, “Finding a better way has been a running theme for us over the past 20 years, whether it’s through the products we offer, or the way we operate our business…And we’ll keep finding a better way for another 20 years, because we are just getting started.”
In reaction to the upbeat fourth-quarter earnings and outlook, which we will discuss later in this series, Under Armour’s stock price soared by 22.6% to $84.07 on January 28, 2016. On April 7, UA issued a stock dividend to existing shareholders via its new Class C shares. The issue had the effect of a two-for-one stock split. The company’s share price was trading at $41.40 on April 12, 2016, after taking the impact of the issue into account.
As one of Under Armour’s peers in the activewear category, Hanesbrands (HBI) had a relatively sedate fiscal year in contrast. HBI’s activewear sales rose by 10.7% to $1.6 billion in fiscal 2015.
Under Armour also made two of its biggest-ever acquisitions, snapping up app platforms Endomondo and MyFitnessPal for over $0.5 billion in total. These acquisitions will create the world’s largest Connected Fitness communities.
We’ll discuss the revenue expectations from UA in 1Q16 in the next part.