Under Armour Plays It Safe: Fool by Numbers
By
Anders Bylund
January 31, 2008
|
On Jan. 31, sportswear specialist Under Armour (NYSE: UA) released earnings for the 2007 fiscal year, a period ended Dec. 31.
- These numbers are slightly better than the preannounced sales and earnings we were given a couple of weeks ago. Sales were supposed to stop at $605 million, and earnings somewhere between $1.03 and $1.04 per diluted share.
- On the other hand, management said that 2008 revenue trends are pointing somewhere south of $775 million, which is at least $12 million worse than the average analyst has been predicting. And this company has a history of guiding above the current expectations, so the Street should be surprised.
- Under Armour may trade at a premium to its closest rivals, but the company can back up that swagger with some hefty earnings and sales growth.
(Figures in millions, except per-share data.)
Income Statement Highlights
|
FY 2007
|
FY 2006
|
Change
|
|
Sales
|
$606.6
|
$430.7
|
40.8%
|
|
Net Profit
|
$52.6
|
$39.0
|
34.8%
|
|
EPS
|
$1.05
|
$0.79
|
32.9%
|
|
Diluted Shares
|
50.0
|
49.6
|
0.8%
|
Get back to basics with the income statement.
Margin Checkup
|
FY 2007
|
FY 2006
|
Change*
|
|
Gross Margin
|
50.3%
|
50.1%
|
0.2
|
|
Operating Margin
|
14.2%
|
13.2%
|
1.0
|
|
Net Margin
|
8.7%
|
9.1%
|
(0.4)
|
*Expressed in percentage points.
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets
|
FY 2007
|
FY 2006
|
Change
|
|
Cash + ST Invest.
|
$40.6
|
$70.7
|
(42.6%)
|
|
Accounts Rec.
|
$93.5
|
$71.9
|
30.1%
|
|
Inventory
|
$166.1
|
$81.0
|
105%
|
|
Liabilities
|
FY 2007
|
FY 2006
|
Change
|
|
Long-Term Debt
|
$9.8
|
$2.8
|
246.6%
|
The balance sheet reflects the company's health.
Cash Flow Highlights
Free cash flow is a Fool's best friend. But Under Armour didn't let our bestest buddy out to play today.
Competitive Context
|
Market Cap
|
Trailing P/E Ratio
|
CAPS Rating (out of 5)
|
|
Nike (NYSE: NKE)
|
$29,537
|
17.0
|
****
|
|
American Eagle Outfitters (NYSE: AEO)
|
$4,833
|
12.7
|
****
|
|
Phillips-Van Heusen (NYSE: PVH)
|
$2,244
|
12.8
|
***
|
|
Under Armour
|
$1,827
|
29.9
|
***
|
|
Columbia
Sportswear (Nasdaq: COLM)
|
$1,506
|
11.1
|
****
|
Using the latest reported numbers from Capital IQ. Keep your partners close and the competition in your vest pocket.
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