Under Armour Profit Falls 75 Percent, Revenue Up 30 Percent
From the Associated Press
Baltimore-based sports apparel maker Under Armour said soft margins and marketing expenses caused second-quarter profit to drop 75 percent, to $1.4 million (3 cents a share) from $5.7 million (11 cents), but results still topped Wall Street expectations. Revenue rose 30 percent, to $156.7 million from $120.5 million.
Under Armour said gross margin declined to 45.3 percent from 49 percent because of higher sales of shoes, which have lower gross margins than apparel. Sales of shoes accounted for 29 percent of total revenue, up from 17 percent. Marketing expenses for the second quarter of 2008 were 14.4 percent of revenue compared with 13.5 percent in the prior year. Furthermore, selling, general and administrative expenses rose to $67.6 million from $50.9 million.
The company also raised its outlook for income from operations to $104.5 million to $105.5 million, up from a previous expectation of $103.5 million to $104.5 million. Under Armour expects sales to rise 26 to 28 percent, or $765 million to $775 million, versus analyst expectations for sales of $767.1 million.
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