Under Armour 2014 Annual Report Download - page 42

Net sale
s
increased
$
720.8 million, or 31.7%, to
$
2,997.9 million in 2014 from
$
2,277.1 million in 2013.
T
he increase in net sales primarily reflects:
•
$220.5 million, or 31.5%, increase in North America direct to consumer sales driven b
y
a 17% increas
e
i
n square
f
oota
g
e
i
n our
f
actor
yh
ouse stores,
i
nc
l
u
di
n
g
an 7%
i
ncrease
i
n new stores, s
i
nce Decem
b
e
r
2013, a
l
on
g
w
i
t
h
cont
i
nue
dg
rowt
hi
n our e-commerce
b
us
i
ness;
•$
128.5 million, or 108.4% increase in net sales in other foreign countries, primarily due to increased
di
str
ib
ut
i
on an
d
un
i
tvo
l
ume growt
hi
n our EMEA an
d
Lat
i
n Amer
i
ca operat
i
ng segments; an
d
•
unit growth driven by increased distribution and new offerings in multiple product categories,
i
ncluding continued growth of our training, outdoor and golf apparel product lines, along with growt
h
i
n footwear due to a broader assortment of running and basketball shoes, including our new U
A
S
p
eedFor
m
™
f
ootwear.
License and other revenues
i
ncreased
$
31.4 million, or 57.2%, to
$
86.4 million in 2014 from
$
55.0 millio
n
in 2013. This increase in license and other revenues was primarily due to an increase of
$
18.1 million in revenues
in our MapMyFitness operating segment, along with increased distribution and unit volume growth of our
licensed
p
roducts.
G
ross pro
f
it
i
ncreased
$
375.5 million to
$
1,512.2 million in 2014 from
$
1,136.7 million in 2013. Gros
s
p
rofit as a percentage of net revenues, or gross margin, increased 30 basis points to 49.0% in 2014 compared t
o
48.7% in 2013. The increase in gross margin percentage was primarily driven by the following:
•
approx
i
mate 20
b
as
i
spo
i
nt
i
ncrease
d
r
i
ven pr
i
mar
ily by d
ecrease
d
sa
l
es m
i
xo
f
excess
i
nventor
y
th
rou
gh
our
f
actor
yh
ouse out
l
et stores. We expect t
h
e
f
avora
bl
e
f
actor
yh
ouse out
l
et store sa
l
es m
i
x
i
mpact will continue into 2015
;
•
approx
i
mate 20
b
as
i
spo
i
nt
i
ncrease as a resu
l
to
fhi
g
h
er
d
uty costs recor
d
e
dd
ur
i
ng t
h
epr
i
or year on
c
erta
i
n pro
d
ucts
i
mporte
di
n prev
i
ous years. We
d
o not expect t
hi
s
f
avora
bl
e
i
mpact to cont
i
nue
d
ur
i
n
g
201
5;
T
h
ea
b
ove
i
ncreases were part
i
a
ll
yo
ff
set
b
y:
•
approximate 10 basis point decrease driven by unfavorable foreign currency exchange rate fluctuations.
W
e expect the unfavorable impact of foreign exchange rate fluctuations to continue in 201
5.
Selling, general and administrative expense
s
increased
$
286.7 million to
$
1,158.3 million in 2014 fro
m
$
871.6 million in 2013. As a percentage of net revenues, selling, general and administrative expenses increase
d
to 37.
5
% in 2014 from 37.3% in 2013. These changes were primarily attributable to the following
:
•
Marketin
g
costs increased $86.5 million to $333.0 million in 2014 from $246.5 million in 2013
pr
i
mar
ily d
ue to
i
ncrease
dgl
o
b
a
l
sponsors
hi
po
f
pro
f
ess
i
ona
l
teams an
d
at
hl
etes. As a percenta
g
eo
f
ne
t
revenues, marketin
g
costs increased to 10.8% in 2014 from 10.5% in 2013 primaril
y
due to the items
n
oted abo
v
e.
•
Selling costs increased $81.0 million to $320.9 million in 2014 from $239.9 million in 2013. This
i
ncrease was pr
i
mar
il
y
d
ue to
hi
g
h
er personne
l
an
d
ot
h
er costs
i
ncurre
df
or t
h
e cont
i
nue
d
expans
i
on o
f
our
di
rect to consumer
di
str
ib
ut
i
on c
h
anne
l
,
i
nc
l
u
di
ng
i
ncrease
di
nvestment
i
n our
f
actory
h
ouse an
d
b
ran
dh
ouse store strateg
i
es. As a percentage o
f
net revenues, se
lli
ng costs
i
ncrease
d
to 10.4%
i
n 201
4
f
rom 10.3%
i
n 2013.
•
Product innovation and supply chain costs increased
$
82.4 million to
$
291.6 million in 2014 fro
m
$
209.2 million in 2013 primarily due to higher personnel costs to support our growth in net revenues,
a
long with increased investment in our MapMyFitness business. As a percentage of net revenues
,
product innovation and supply chain costs increased to 9.4% in 2014 from 9.0% in 2013 primarily due
t
o the items noted above
.
32