Under Armour 2012 Annual Report Download - page 5

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tinue to build upon that momentum in 2013.
Some of that momentum will be evident in
Running footwear, where we built upon some
of the early success of our $120 UA Charge RC
product and Micro G cushioning technology
to unveil UA Spine last July. UA Spine is our
unique stance on melding lightweight and sta-
bility, and the platform will move well beyond
running in 2013.
Great product requires great distribution,
and we continue to work with our partners like
Dick’s Sporting Goods, The Sports Authority,
and Academy to elevate our Brand. Ongoing
investments such as our All-American and
Blue Chip shop-in-shops with Dick’s Sporting
Goods are providing a more comprehensive as-
sortment to our consumers. At the same time,
we continue to look for new ways to reach con-
sumers, especially in channels that are more
relevant to certain product categories like
Women’s and Youth. To that end, we entered
more than 500 new department store doors
in 2012, including Macy’s, Dillards, Belk and
Lord & Taylor, and are positioned to broaden
this reach going forward.
Our conversation around distribution
would not be complete without our Direct-to-
Consumer channel. Direct-to-Consumer net
revenues grew 34 percent in 2012 to over a half
of a billion dollars, or nearly the size of our en-
tire business in 2007. The channel represented
29 percent of total net revenues for the year, up
from 27 percent in 2011 and 23 percent in 2010.
The bulk of this business is driven by our Fac-
tory House outlet stores, which continue to help
us better manage our excess inventory while
reaching out and providing value to our con-
sumers. We expanded this store base in the U.S.
from 80 stores in 2011 to 101 in 2012.
Beyond outlets, we opened the next gen-
eration of UA Specialty with our Harbor East
store in downtown Baltimore in February
2013. Delivering an unrivaled store experi-
ence through specialization, localization, and
innovation, the store provides an important
learning lab that we will continue to refine
and test with additional stores in the future in
strategic locations.
Rounding out Direct-to-Consumer, Ecom-
merce will continue to be a growth vehicle for
the company as we drive enhanced merchan-
dising and storytelling, including a clearer
connection with some of our larger branding
initiatives planned in 2013.
While all these initiatives continue to drive
our business at home, we are mindful that the
opportunities abroad are bigger. Our interna-
tional business represented only 6% of net rev-
enues in 2012, and we continue to believe that
the strength in our core U.S. business affords
us the opportunity and patience to make the
right decisions in Europe, Latin America, and
Asia. We are able to take a different, broader
approach to how we enter these markets. Our
grassroots efforts help us build the Brand by
being intensely focused on sport authenticity
in local markets. We are able to balance this
approach with larger brand-building initia-
tives such as the July 2012 introduction of
our kit for Tottenham Hotspur of the English
Premier League, reaching over 20 million fans
globally. Finally, in the age where we are all
connected like never before through technol-
ogy, we have the ability to change the tradi-
tional approach to reaching consumers in new
markets through digital means like Ecommerce
and social media.
With all of our focus on building great prod-
uct for athletes, no
element of our busi-
ness is more criti-
cal to our success
than the continued
development of our
team. As we build
the organizational
structure in Balti-
more and around
the world, we will
consistently sup-
plement this great
leadership to help ensure our progress as a lead-
ing global athletic brand. In 2012, we added
new leadership within International, Supply
Chain, Women’s, and Human Resources. Our
success in 2012 is a direct result of the team
we have and continue to build in Baltimore and
around the world.
Expect to see more of us in 2013 and be-
yond. Expect a louder, more focused, more
disruptive voice. Expect more innovation and
product that redefines how an athlete performs.
As we prepare for 2013 and beyond, we will re-
main humble in the success we have achieved
and hungry to press on to new opportunities.
Kevin A. Plank
Chairman of the Board of Directors &
Chief Executive Officer
$208,696
+28%
$162,767
+45%
$112,355
+32%
$85,273
+11%
$76,925
-11 %
WE HAVE DELIVERED 11 CONSECUTIVE
QUARTERS OF 20%+ GROWTH, WHICH
HAS ENABLED US TO ADD NEARLY $1
BILLION IN NET REVENUES OVER THE
PAST THREE YEARS.
INCOME FROM OPERATIONS
IN THOUSANDS; YEAR 2008–2012
2008 2009 2010 2011 2012
5-YEAR COMPOUND ANNUAL GROWTH RATE* 19.3%
* Based on fiscal year 2007 income from operations of $86,265
NET REVENUES BY PRODUCT
CATEGORY YEAR 2012
APPAREL 75.6%
FOOTWEAR 13.0%
ACCESSORIES 9.0%
LICENSING REVENUES 2.4%
GAME-CHANGING PRODUCT LIKE
THE UA HIGHLIGHT CLEAT HAS
PROVIDED MOMENTUM FOR US IN
OTHER FOOTWEAR CATEGORIES.