Under Armour's net income climbed by 163 percent in the second quarter ended June 30 compared with the previous year's period, reaching $17.6 million. The results, which topped Wall Street's expectations, were primarily driven by higher sales of base-layer apparel as well as football cleats and other shoes.
New apparel items, well-received new footwear offerings, and a renewed focus to win over more female consumers lifted Under Armour's top line, leading to a 23 percent increase in revenues for the quarter to $455 million as compared to the second quarter of 2012, marking the 13th consecutive quarter with revenue growth in excess of 20 percent. The North America market, from which Under Armour derives most of its revenues, registered strong demand for athletic gear, with sales from that region rising by 23 percent. International sales, which Under Armour has called its biggest growth opportunity, jumped by 25 percent to $25.7 million in the latest quarter.
Apparel revenues were up by 23 percent to $310 million in the quarter, mainly driven by new base-layer products, pants and shirts designed to keep athletes warm but also dry when working out, as well as the expansion of the Storm and Charged Cotton platforms. Footwear revenues increased by 21 percent to $82 million, led by the Highlight football cleat and Spine footwear. Accessories increased by 30 percent to $51 million, primarily driven by headwear. Direct-to-consumer revenues, which represented 30 percent of total revenues for the quarter, grew by 29 percent over last year's second quarter.
The gross margin for the quarter widened to 48.3 percent compared with 45.9 percent in the previous year's quarter, primarily reflecting lower apparel and accessories product costs and a favorable sales mix. Selling, general and administrative expenses, as a percentage of sales, were down to 41.2 percent in the quarter as compared to 42.7 percent in the previous year's period, primarily reflecting the timing of marketing expenses.
The company has revised its guidance and now expects 2013 net revenues in the range of $2.23 billion to $2.25 billion, representing growth of 22 percent to 23 percent over 2012, and 2013 operating income in the range of $258 million to $260 million, representing growth of 24 percent to 25 percent over 2012. The company's management said that it expects a strong second half of the year, driven by product introductions such as the ColdGear Infrared technology, which allows athletes to stay warm longer, on which the company intends to build up its leadership position in base-layer products this autumn.
