Under Armour 2010 Annual Report Download - page 24

• currency exchange fluctuations;
• the imposition of new laws and regulations, including those relating to labor conditions, quality and
safety standards, imports, duties, taxes and other charges on imports, trade restrictions and restrictions
on the transfer of funds, as well as rules and regulations regarding climate change;
• reduced protection for intellectual property rights in some countries;
• understanding foreign consumer tastes and preferences that may differ from those in the United States;
• complying with foreign laws and regulations that differ from country to country;
• disruptions or delays in shipments; and
• changes in local economic conditions in countries where our manufacturers, suppliers or customers are
located.
Sales of performance athletic products may not continue to grow and this could adversely impact our
ability to grow our business.
We believe continued growth in industry-wide sales of performance athletic products will be largely
dependent on consumers continuing to transition from traditional alternatives to performance athletic products. If
consumers are not convinced these athletic products are a better choice than traditional alternatives, growth in the
industry and our business could be adversely affected. In addition, because performance athletic products are
often more expensive than traditional alternatives, consumers who are convinced these athletic products provide
a better alternative may still not be convinced they are worth the extra cost. If industry-wide sales of performance
athletic products do not grow, our ability to continue to grow our business and our financial condition and results
of operations could be materially adversely impacted.
Our operating results are subject to seasonal and quarterly variations in our net revenues and net income,
which could adversely affect the price of our Class A Common Stock.
We have experienced, and expect to continue to experience, seasonal and quarterly variations in our net
revenues and net income. These variations are primarily related to increased sales of our products during the fall
season, reflecting our historical strength in fall sports, and the seasonality of sales of our higher priced
COLDGEAR®line. The majority of our net revenues were generated during the last two quarters in each of
2010, 2009 and 2008, respectively.
Our quarterly results of operations may also fluctuate significantly as a result of a variety of other factors,
including, among other things, the timing and introduction of advertising for new products and changes in our
product mix. Variations in weather conditions may also have an adverse effect on our quarterly results of
operations. For example, warmer than normal weather conditions throughout the fall or winter may reduce sales
of our COLDGEAR®line, leaving us with excess inventory and operating results below our expectations.
As a result of these seasonal and quarterly fluctuations, we believe that comparisons of our operating results
between different quarters within a single year are not necessarily meaningful and that these comparisons cannot
be relied upon as indicators of our future performance. Any seasonal or quarterly fluctuations that we report in
the future may not match the expectations of market analysts and investors. This could cause the price of our
Class A Common Stock to fluctuate significantly.
The value of our brand and sales of our products could be diminished if we are associated with negative
publicity.
We require our suppliers, independent manufacturers and licensees of our products to operate their
businesses in compliance with the laws and regulations that apply to them as well as the social and other
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