Under Armour Plays It Safe: Fool by Numbers

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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