Under Armour (UA) Tops Q1 EPS by 3c; Guides In-Line

Under Armour (NYSE: UA) (NYSE: UAA) reported Q1 EPS of ($0.01), $0.03 better than the analyst estimate of ($0.04). Revenue for the quarter came in at $1.1 billion versus the consensus estimate of $1.11 billion.

• Revenue was up 7 percent to $1.1 billion, driven by a 4 percent increase in wholesale revenue to $773 million and a 13 percent increase in direct-to-consumer revenue to $302 million. North American revenue declined 1 percent as new distribution was more than offset by the absence of business lost to bankruptcies in 2016. International revenue, which is comprised of our EMEA, Asia-Pacific, and Latin America regions, represented 20 percent of total revenue in the quarter, and was up 52 percent (up 57 percent currency neutral). By region, revenue was up 55 percent in EMEA, 60 percent in Asia-Pacific and 30 percent in Latin America. Apparel revenue increased 7 percent to $715 million including strength in training, golf, and team sports. Footwear revenue grew 2 percent to $270 million, against last year\'s same period which was up 64 percent due to significant strength in basketball sales and the timing of liquidations. Accessories revenue increased 12 percent to $89 million with strength in men\'s training, running, youth, and global football.
• Gross margin was down 70 basis points to 45.2 percent as benefits from channel and product mix were offset by continued efforts to manage inventories appropriate to market demand.
• Selling, general and administrative expenses increased 12 percent to $498 million, or 44.6 percent of revenue (up 210 basis points), due to continued investments in the direct-to-consumer, footwear and international businesses.
• Operating income was $8 million. There was a net loss of $2 million in the first quarter and a $0.01 loss in diluted earnings per share.

GUIDANCE:

Under Armour sees FY2017 revenue of $5.4 billion, versus the consensus of $5.36 billion.

For earnings history and earnings-related data on Under Armour (UA) click here.

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