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Under Armour’s direct to consumer revenue increases 23%

February 1, 2017 12:31 PM
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Sportswear designer and market Under Armour Inc., reports that direct-to-consumer revenues, which includes its e-commerce sales and revenues of its 241 factory outlets and branded retail stores, grew 23% year over year to $518 million in Q4 from $421.6 million. Direct-to-consumer sales accounted for nearly 40% of overall sales in Q4, CEO Kevin Plank told investors in an earnings call on Tuesday, according to a transcript from Seeking Alpha. The company’s largest revenue stream is still its wholesale business.

For the year, direct-to-consumer sales increased 27% to $1.5 billion, which is 31% of total revenue, compared with 30% in 2015.

The company’s Q4 total revenues, however, increased 12% to $1.31 from $1.17 billion in Q4 2015, which marks the first quarter in more than six years that revenue did not grow 20%. Plank attributed this to several factors, including deep and broad discounting and a high consumer demand for fashionable apparel as opposed to performance gear.

For 2017, Under Armour expects direct-to-consumer, footwear and international sales to be the main growth drivers of its business, said David Bergman, Under Armour’s senior vice president of corporate finance.

Its Connected Fitness platform will help the sports apparel company sell more clothing, Plank said.

Almost 200 million consumers make up Under Armour’s Connected Fitness community, which includes buyers of its health-tracking wearable devices and its four fitness apps:  Under Armour’s fitness recording app Record, personal training app Endomondo, weight loss coaching app MyFitnessPal and exercise tracking app MapMyFitness.

“We think that the amount of data that the 200 million users we have telling us how much they exercise, what they ate and giving us data that will help us learn more about them ultimately help us sell more shirts and shoes, (which) is something important,” Plank said.

Connected Fitness revenues grew 8% to $18.3 million from $17.0 million for the fourth quarter ended Dec. 31, and grew 51% year over year to $80.5 million from $53.4, Plank said.

Plank also announced that the chief financial officer Chip Molloy is leaving the company for personal reasons. Molloy held the position for one year, according to LinkedIn. Bergman will become chief financial officer on Feb. 3, Plank said.  

Under Armour ranks No. 100 in the Internet Retailer 2016 Top 500 Guide.

For the fourth quarter ended Dec. 31

  • $1.31 billion in net revenue, a 12% increase from $1.17 billion in Q4 2015.
  • North American revenue of $1.08 billion a 6% increase from $1.02 billion.
  • Net income of $104.9 million, a 0.66% decrease from $105.6 million.

For the full year, the company reported:

  • $4.83 billion in net revenue, a 22% increase from $3.96 billion last year.
  • North American revenues of $4.01 billion a 16% increase from $3.46 billion.
  • Net income of $258.7 million an 11% increase from $232.6 million.

 

 

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