Under Armour(US:UA)2021-11-02 16:23Financial Data and Key Metrics Changes - Revenue increased by 8% to $1.5 billion, with gross margin rising 310 basis points to a record 51% [6][18][24] - Adjusted diluted earnings per share (EPS) reached $0.31, surpassing previous full-year adjusted EPS records [21][27] Business Line Data and Key Metrics Changes - Apparel revenue grew by 14%, particularly strong in training and golf categories [18] - Footwear revenue increased by 10%, driven mainly by running products [18] - Direct-to-consumer business rose by 12%, with owned retail stores up 21% [17][14] Market Data and Key Metrics Changes - North America revenue was up 8% to $1 billion, with a 2% increase compared to 2019 [10][11] - Asia-Pacific revenue surged by 19%, primarily due to wholesale growth, with a 37% increase compared to 2019 [12] - EMEA revenue grew by 15%, with a 50% increase compared to 2019 [13] - Latin America revenue rose by 27%, with an 8% increase compared to 2019 [13] Company Strategy and Development Direction - The company focuses on sustainable long-term growth while delivering near-term shareholder value [5][31] - Investments in marketing are aimed at enhancing brand affinity and consumer connections [6][8] - The strategy includes reducing reliance on off-price sales to elevate brand positioning [17][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in brand health and growth potential despite near-term headwinds [6][15] - Supply chain challenges are anticipated to impact the first half of 2022, with proactive measures being taken [23][28] - The company expects revenue growth of approximately 25% for the full year 2021, with cautious optimism for 2022 [24][29] Other Important Information - Inventory decreased by 21% to $838 million, reflecting improved operational efficiency [21] - Cash and cash equivalents stood at $1.3 billion, with no borrowings under the revolving credit facility [22] Q&A Session Summary Question: Supply chain challenges and product availability for Q4 - Management noted improvements in container availability but highlighted ongoing challenges at local ports affecting inbound product delivery [35][36] Question: North American market momentum - Management emphasized healthier revenue streams with reduced off-price sales and less promotional activity, contributing to brand strength [38][39] Question: Pricing power and gross margin outlook - Management indicated strong pricing power due to reduced promotions, contributing positively to gross margins [46][47] Question: DTC profitability and growth expectations - Management acknowledged improvements in DTC profitability but did not disclose specific percentages, indicating ongoing investments in this channel [51][53] Question: Product cost inflation and pricing strategies - Management is monitoring inflationary pressures and is strategically planning price increases for future product lines [56][57] Question: Off-price channel dynamics - Management has successfully reduced reliance on the off-price channel to about 3% of revenue, which has positively impacted gross margins [62] Question: SKU management and productivity initiatives - Management reported a 50% reduction in SKUs since 2017, maintaining a balanced approach to product offerings [65][67] Question: Sourcing and supply chain issues - Management confirmed a balanced sourcing strategy across regions, with ongoing logistics challenges expected to impact the first half of 2022 [70][72]