Under Armour Inc.’s profit surged in the second quarter.
For the period ended June 30, the Baltimore-based firm earned a net income of $6.2 million, or 12 cents a share, an increase of more than 70 percent over $3.5 million, or 7 cents, earned a year earlier.
Net revenue grew 42 percent to $291.3 million, from $204.8 million, thanks to broad-based strength in the footwear, apparel and direct-to-consumer businesses.
Second-quarter footwear revenue increased 31 percent to $46.9 million, while apparel sales advanced 36 percent to $204.8 million. Direct-to-consumer revenue grew 81 percent to now make up more than a fourth of the quarter’s total revenue.
Second-quarter accessories net revenue increased the most, more than tripling to $32.4 million year-over-year, driven primarily by the transition of the previously licensed hats and bags business to in-house.
Two areas for concern, however, linger: Inventory as of June 30 increased 74 percent year-over-year to $311.1 million, reflecting the firm’s higher anticipated consumer demand in 2011; while gross margin slipped 250 basis points to 46.3 percent, due to less favorable apparel product margins.
Kevin Plank, president, chairman and CEO of Under Armour, said the quarter’s performance will help the firm achieve its goal of doubling net revenue to more than $2.1 billion by 2013.
“Our brand communication will expand in the coming months as we build our voice in footwear with Micro G cushioning technology. We also will begin to implement compelling new shop-in-shop formats with our existing retail partners. 2011 is a year where we are on the offensive to better meet the high expectations of our consumers,” Plank said in a statement.
Under Armour ended the quarter with cash and cash equivalents of $119.7 million and $55.2 million in long-term liabilities.
The company also raised its guidance for the full year. It now expects 2011 net revenue to grow between 33 percent and 35 percent over 2010, and operating income to grow between 38 percent and 42 percent.