Under Armour Profits Down 71 Percent
Sports apparel maker Under Armour Inc. said Tuesday its first-quarter profit tumbled 71 percent, weighed down by increased marketing expenses, but beat Wall Street's expectations.
For the quarter ended March 31, the company reported income of $2.9 million, or 6 cents per share, compared with $9.9 million, or 20 cents per share, in the year-ago period.
Revenue rose 27 percent to $157.3 million from $124.3 million in the first quarter of 2007.
Analysts polled by Thomson Financial, on average, estimated earnings of 3 cents per share on sales of $153.7 million.
Sales were boosted by a 25 percent increase in apparel revenue with strong growth across the men's, women's and youth segments, the company said. Footwear revenue increased 40 percent to $16.6 million.
Cost of goods sold rose 29 percent to $82.5 million, while selling, general and administrative expenses increased 58 percent to $70.5 million -- primarily because of higher marketing expenses, Under Armour said. The company previously said it would shift a substantial portion of its full-year marketing spending to the first half of the year.
Marketing expenses for the first quarter were 18 percent of revenue, compared with 11 percent in the prior-year quarter. Under Armour said it will continue to invest 12 percent to 13 percent of revenue in its marketing budget for the full year.
April 29, 2008; 10:24 AM ET
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