North American sales slip, but Under Armour's e-commerce and growing store count help boost sales.

Under Armour Inc.’s direct-to-consumer revenue increased 13% to $302 million in the first quarter ended March 31, the sports apparel retailer reported this week.

Direct-to-consumer revenue includes Under Armour’s e-commerce sales and revenue from the manufacturer’s 245 stores, which includes 188 factory outlets and 57 branded retail stores. The 13% growth is balanced among the online, store and outlet channels, David Bergman, senior vice president, corporate finance, told investors on an earnings call, according to a Seeking Alpha transcript. Under Armour increased its store count by 23.7% year over year, opening 47 more stores over the past year to add to the 198 retail locations it had a year ago.

Total sales increased 6.7% to $1.12 billion in the quarter from $1.05 billion a year ago. However, Under Armour’s North American revenue decreased 1.1% to $871.3 million from $880.6 million, and the retailer took a $2.3 million net loss. The retailer said it struggled with a “promotional environment” in retail, and it’s still feeling the effects of last year’s Sports Authority bankruptcy and liquidation, which has had an impact on the brand’s distribution.

In the quarter, the retailer completed and went live with its “single view of the consumer” software system, which combines data from its store-based point-of-sale system, e-commerce sales and transaction information from its mobile health tracking Connected Fitness platform.

“What used to take weeks or even months for us to get information on new product performance, trending workouts and demographics, now takes seconds with the speed and analytical horsepower provided by this incredible consumer-insights engine,” CEO Kevin Plank said.

advertisement
Under Armour’s direct-to-consumer revenue increases 13%

Dwayne Johnson, aka “The Rock”

The retailer used this software on two product launches during the quarter—its Athlete Recovery Sleepwear, launched with NFL quarterback Tom Brady, and the Project Rock collection, a collaboration with actor and pro wrestler Dwayne “The Rock” Johnson.

“Using UA’s single view of the consumer, we’re able to instantaneously analyze consumer purchase behavior including gender, ages and workout frequency among other attributes,” Plank said. “These insights will now be integrated in a next-gen product development, helping drive discussions around product planning, assortments, future marketing and ultimately a better and more premium experience for our consumers.”

Under Armour is No. 36 in the just-released Internet Retailer 2017 Top 1000.

For the first quarter ended March 31:

advertisement
  • $1.12 billion in net revenue, a 6.7% increase from $1.05 billion in Q1 2016.
  • North American revenue of $871.3 million, a 1.1% decrease from $880.6 million.
  • Net loss of $2.3 million compared with a $19.2 million gain.
  • Connected Fitness revenue of $18.9 million, a 2.2% increase from $18.5 million.
Favorite