Under Armour had a rather big day Thursday.
The sportswear maker announced that not only did it reach its long-awaited goal of $1 billion in sales in 2010, but it also found a headquarters to buy — the property Under Armour already occupies.
And while the company was at it, its shares soared nearly 11 percent for the day to close at $59.79.
“We’re exceeding expectations,” CEO Kevin Plank said. “Our results demonstrate the strength of our brand, and we will carry this momentum forward.”
Under Armour announced fourth-quarter net income of $22.9 million, or 44 cents per share, up from $15.2 million in the year-ago period, on revenue of $301.2 million, a 36 percent increase in sales. Analysts polled by Thomson Reuters expected earnings per share of 37 cents.
The company also said it would pay $60.5 million to buy the Tide Point office complex in Locust Point.
Under Armour has been headquartered at the South Baltimore property since 2002. The company leases 125,000 of the property’s 400,000 square feet. Other tenants in the five-building complex are Advertising.com and Mercy Health Services.
During a conference call with investors Thursday, CEO Kevin Plank said the deal is expected to close within the next 60 to 90 days.
Under Armour’s apparel revenue jumped 32 percent to $254 million during the last three months of the year, while shoe sales climbed from $8.7 million to $21.9 million.
Under Armour’s 2010 sales increased 24 percent to $1.06 billion, compared with $856.4 billion in 2009. That also surpassed guidance the company gave Wall Street of $1.03 billion in revenue. Earnings per share for the year increased 46 percent to $1.34. The company expects 2011 net revenue to top $1.3 billion.
“We are proud of the results posted on the scoreboard in 2010. One billion dollars in revenue is a solid foundation and opportunities remain abundant both domestically and across the globe,” Plank said in a statement. “We have assembled a winning leadership team and are making the right investments to enhance our near-term growth opportunities in wholesale apparel and direct-to-customer, while continuing to build our long-term footwear and global platforms.”
Those investments include Tide Point. Under Armour said it would acquire the former Procter & Gamble manufacturing plant, revamped by developer C. William Struever and opened in 2001, as a waterfront home for high-tech firms. The 14.6-acre complex is owned by Hull Street LLC and is assessed at $50 million, according to the Maryland Department of Assessments and Taxation. The Baltimore Sun first reported the news of the sale.
Under Armour also divulged more information on the debut of “performance cotton” t-shirts this spring. Plank said the new “charged” shirt will be “one of the biggest products we’ve had since the first shirt in 1996.” Priced at $25, the shirt will be 95 percent cotton and 5 percent of other fibers and elastic products, Plank said. Company officials said the shirt would be available to ship to retailers around mid-February.
Until now, all of Under Armour’s performance apparel has been made with moisture-wicking synthetic fibers.
To grow Under Armour, Plank said the company needed to grow its running footwear business and launch the cotton shirt.
Oppenheimer and Co. Inc. analyst Pamela Quintiliano said that while the new products could be very good for the company’s sales, their launch could be bumpy.
“The cotton launch and the running shoe are the two big exciting opportunities,” Quintiliano said. “The cotton t-shirt launch is something that is very new for them, and there’s a little bit of confusion and disconnect as well. After all, this is the company that has screamed from the hills they’re anti-cotton.”
Overall, Quintiliano said the conference call was very transparent with investors and analysts, and the company has a “fundamentally solid story.”