Under Armour posted a 25 percent sales increase to $805 million in the first quarter compared with the previous year's period. The period marked the 20th consecutive quarterly increase of more than 20 percent. In terms of local currencies, the growth rate was just a little higher at 27 percent.
International revenues, which accounted for 12 percent of total revenues in the first quarter, grew by 74 percent in dollars and by 86 percent local currencies, boosted by the company's first stores in Brazil and the Middle East. Considering the company's plans to expand its operations in Latin America, Asia, Europe and Australia, the share of international sales within overall sales is expected to rise further in the near future.
Sales more than tripled in China, with accelerating gains in partner stores and online. Erick Haskell, a former manager of Adidas, has joined UA as general manager for China. In Europe, UA has set up an office in Germany and launched e-commerce in the Netherlands. The company's first regional Brand House in the Middle East has opened in Abu Dhabi.
Global apparel sales, which accounted for about 75 percent of Under Armour's net revenues, increased by 21 percent to $555 million in the first quarter, primarily driven by strength in the base-layer product line and newly introduced training products.
Footwear revenues jumped 41 percent to $161 million, positively impacted by a strong increase in the running category and the introduction of the Curry One, Stephen Curry's signature basketball shoe. Expanded SpeedForm running offerings, which showed good sell-through rates, and the performance of the ClutchFitDrive baseball shoe also contributed to growth in the footwear category. Footwear represented 20 percent of the company's net sales in the quarter.
Accessories revenues increased by 23 percent to $63 million. Direct-to-consumer revenues, which made up for 25 percent of total revenues for the first quarter, were up by 21 percent. During 2014, DTC revenues had risen by 32 percent.
The gross margins remained flat at 46.9 percent, primarily reflecting higher product margins in apparel and footwear offset by higher transport and freight costs and the negative impact of currency fluctuations. The operating income increased to $28 million, marking a 3 percent increase versus the prior year's period. Net earnings declined by 13 percent to $11.7 million, reflecting higher marketing expenses and costs related to the acquisitions of Endomondo and MyFitnessPal in its Connected Fitness segment during the quarter.
The company management raised its 2015 revenue outlook from around $3.76 billion, representing a 22 percent growth over 2014, to around $3.78 billion, representing growth of 23 percent. The company had also previously anticipated 2015 operating income to range between $397 million and $407 million, representing growth of 12 percent to 15 percent over 2014. It now expects 2015 operating income to range between $400 million and $408 million, representing growth of 13 percent to 15 percent over 2014. The guidance continues to reflect the impact of the Connected Fitness acquisitions, as well as the negative impact of the strong dollar on the operating margin of its international businesses.