Under Armour, Inc. Q2 2009 Earnings Call Transcript

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2009-07-28 11:26:18.0

Tags: Apparel, Call Transcript, Earnings, Credit Suisse Group AG, Under Armour Inc., Sales Strategy, Sales Force Management, Gender And Diversity, Scripting Languages, Sales, Human Resources, Software/Web Development, Web Development, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Omar Saad – Credit Suisse.

Omar Saad – Credit Suisse

On the apparel side of the equation, could you help us understand, I think it came in better than a lot of us expected showing some strong resiliency after a couple quarters of slower sales growth. Can you help us understand how much of that was from distribution growth versus comp growth versus ASP's, what role the ASP's play and men's versus women's and kids and if there is any disparity in the growth level in the second quarter on the apparel side.

David McCreight

We actually saw a pretty broad based acceptance to apparel in the quarter. As I said earlier, and as Kevin mentioned, we saw success in men's, women's and youth, so it was broadly received. In terms of actual distribution, we saw it with some key strategic account success as well as strength in our direct to consumer channels as well.

Omar Saad – Credit Suisse

Was there a big change in the amount of distribution you had year over year in apparel?

David McCreight

No.

Omar Saad – Credit Suisse

And on the ASP side, was there much change?

David McCreight

Not material.

Operator

Your next question comes from Kate Mcshane – Citi Investment Research.

Kate Mcshane – Citi Investment Research

Would you mind repeating what you said about inventories in the back half? Did you say you expect them to be up in line with sales?

Brad Dickerson

At the end of Q4 we expect it to be slightly below our sales growth for the year. Right now, Q3 probably relatively flat to maybe up a little bit, but more Q4 to be down year over year compared to the revenue growth.

Kate Mcshane – Citi Investment Research

In terms of liquidation sales for apparel, how should we think about that for the second half relative to what you saw during the second quarter?

Brad Dickerson

I think when you look at apparel liquidation, I think it's important to note again, we talked historically about how we've handled the liquidations on the apparel side. We have our choice here of moving them through the outlet channel, our outlet channel, moving them through third parties and also holding on to that inventory for maybe future outlet sales down the road.

We thought in this environment first of all, again more of a balance sheet liquidity play in this environment, we thought is was important to really look at our inventory and really make sure that we're as clean as possible going into next year.

 

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