Third-quarter sales rise 22.0%
Under Armour (UA), which reported its 3Q16 results on October 25, 2016, saw its top line rise 22.0% YoY (year-over-year) to $1.47 billion. On a constant currency basis, there was a rise of 23.0% in sales compared to the same quarter last year. The current quarter marked the 26th consecutive quarter of more than 20.0% top-line growth for the company.
In comparison, competitors Nike (NKE), Lululemon Athletica (LULU), and Columbia Sportswear (COLM) recorded year-over-year sales growth of 7.7%, 13.5%, and 2.2%, respectively, in their last reported quarters.
Strong DTC channel and international sales boost top line
While Under Armour reported a rise in sales for all its channels, growth in DTC (direct-to-consumer) revenues outpaced the growth in the others. DTC revenues rose 29.0% YoY compared to a rise of 19.0% in wholesale and a rise of 21.0% in licensing.
Under Armour’s North American sales, which account for the majority of the company’s top line, rose 16.0% YoY, suggesting a continuous demand for UA products. The company’s international sales, however, stole the show, rising 74.0% YoY.
Footwear business continues to show strength
Among Under Armour’s product categories, its footwear business was the best performer. Footwear sales rose 42.0% YoY led by strong momentum in the running and basketball categories. UA’s recent success in footwear has even challenged the dominance of sportswear giant Nike.
UA’s apparel segment, which accounts for ~70.0% of the company’s total revenue, rose 18.0% YoY, driven by men’s training, women’s training, and team sports.
Accessories, the company’s smallest segment, also saw net revenues rise 18.0% YoY during the quarter. The rise was driven by higher sales of headwear and bags.
ETF investors seeking to add exposure to UA can consider the Consumer Discretionary Select Sector SPDR ETF (XLY), which invests 0.30% of its portfolio in the company.
In the next part, let’s take a look at Under Armour’s margins.