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Equipping A New Wave Of Female Athletes
(By Michael Lutzky For The Washington Post)
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The company reported strong earnings overall during the quarter. Sales grew 51 percent compared with the same period last year, to $121 million. Profit jumped 136 percent to $5.7 million, or 11 cents per share. The company also increased its earnings forecast for fiscal 2007 sales to between $580 million and $590 million -- a 35 to 37 percent increase from 2006 results.
"On both the top and bottom line, the results were stronger than anticipated," said James Maher of ThinkEquity Partners, an investment banking firm.
That's not bad for a company that was started out of Plank's car. Under Armour has been a homegrown success story since 1996, the year Plank graduated from the University of Maryland. He had realized that the soggy, sweaty cotton T-shirts his Terrapin football teammates wore underneath their gear were weighing them down. But his Lycra compression shorts kept him cool and dry.
Plank fashioned the first Under Armour shirts out of lingerie material and gave them away to his teammates. When some of those friends went on to play for the National Football League, Plank suddenly had celebrity endorsements. Soon, sporting behemoths such as Nike and Adidas created similar moisture-wicking garments. A niche -- and heated competition -- was born.
"Because Under Armor was the first, they're considered the pure, authentic one," McGee said.
The company went public to much fanfare in 2005. The initial public offering was the most successful offering by a U.S. company in five years, virtually doubling on its opening day. The stock was originally set at $7.50 a share but was bumped up to $13 a share at the last minute because of high demand. The day of the offering, Under Armour stock hit $31 before closing at $25.30.
Maher said he thinks Under Armour is laying the groundwork for solid growth over the next several years. But he cautioned that the company's rivals are formidable and that its history is short. Management is still green and grappling with heady growth, he said.
"Right now I think that one of their main challenges is that the expectations are very high," Maher said.
