Under Armour’s billion dollar quarter

Endaba Group

The athleisure apparel brand report its first $1bn quart of sales this week, resulting in a 22.5% increase in its stock. Their third-quarter sales of $1.17bn exceed expectations of $1.11bn in net revenue, a 31% increase from last year’s $895m for the same quarter. Analysts were predicting  that the company would not fare well with the warm weather in the winter .

They are also committed to their womenswear, investing in their team, since they didn’t have a dedicated womenswear team 18 months ago, however, still delivering double digit growth for womenswear in the last quarter. Athleisure is a rising category, as consumers don’t want to wear uncomfortable clothes. Instead of stealing Nike’s market share, Under Armour seems to be taking share from the rest of the apparel industry.

Investments in technology impacted the balance sheet. Total debt mushroomed from $284 million at the end of 2014 to $669 million at the end of 2015, reflecting the borrowing to fund the two Connected Fitness acquisitions. Cash plunged from $593 million at the end of 2014 to $130 million at the end of 2015.

They are predicting 2016 net revenues of $4.96bn, 25% increase from 2015.