The sports apparel and footwear manufacturer, Under Armour (NYSE:UA), has been shining brightly from quite some time now. The company does not seem to stop its continuous urge for growth. This was proved yet again when the sports retailer posted another blockbuster quarter. The numbers were way ahead of the Street’s estimates, sending its stock prices higher.
Under Armour Did It Yet Again
Revenue jumped a remarkable 36% to $642 million, surpassing the estimates of $599 million. This increase was largely driven by growth across all the segments. Apparel segment, the largest segment by revenue, surged 33% to $459 million during the quarter. The footwear segment too did well with growth of 41% and the international segment rising more than 70% over last year.
Even the direct-to-customer segment did extremely well, registering sales growth of 33%. The retailer witnessed growth mainly because of its efforts into innovating new products which resonated well with customers. For instance, the introduction of the SpeedForm Apollo running shoe drove sales higher for the footwear segment. The launch helped attract customers to its stores who also bought other footwear, resulting in higher sales.
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Moreover, the company ramped up its marketing and selling techniques which proved to be helpful. Despite increased marketing and selling expenses, Under Armour managed to post a gross margin expansion of 100 basis points driven by higher sales and lower input costs. Earnings increased a whopping 71% to $0.06 per share over last year’s quarter.
Future looks bright
Under Armour declared that it remains focused on women’s business since this segment has been a great growth driver. It plans to continue to expand its women’s business which should help sales grow further. Also, the retailer has a lot of room for growth in the men’s segment since this category is yet to be explored in a large way.
The Baltimore-based retailer launched a new apparel collection which caters to people who play golf. The collection also includes other outdoor wear, expanding its reach in the sports segment by adding another premium sport products to its product portfolio. This should help in driving sales higher in the coming months.
The company has also expanded into new products for people who are engaged in hunting and fishing. This move will help the retailer cater to premium customers. Also, these products will give higher margins.
Moreover, the retailer acquired MapMyFitness, a workout application company, in order to provide customers a fitness-tracking device. The acquisition was made in November last year and the number of registered users has grown to 24 million from 20 million in the last holiday season. The company aims to have a total of 30 million registered users by the end of 2014.
Expansion is indeed the key word for Under Armour. The retailer is not only expanding its product portfolio, but also its international footprint. Areas of interest for expansion are China, Taiwan, Brazil and Hong Kong. Therefore, these expansionary efforts should help the company grow.
Under Armour is indeed a great performer. With a stock price appreciation of 100% over the last year, the retailer is making all the right moves for a brighter future. The company’s striving for innovation and efforts for expansion make it look even more attractive. Hence, this sports retailer should be increasingly rewarding in the long run.