Under Armour Inc (NYSE:UA), the athletic wear company, announced its second quarter earnings on Tuesday. The results were in line with expectations, however, earnings dropped due to the liquidation of Sports Authority and dividend paid out to shareholders.
According to the statement, net revenue increased 28% year-over-year compared to the $784 million in the same period last year, and reached $1.0 billion in the second quarter of 2016, meeting the previous analyst expectations. The company said that driven by the Stephen Curry signature basketball shoe line, the sales increased 58% to $243 million in the second quarter, which is one of the reasons for shoe business growth.
Due to the liquidation of Sports Authority, net income was dropped 58% to $6 million, compared with $15 million in the same period last year. Operating income fell 39% to $19 million in the second quarter, also showing the impact of the bankruptcy of Sports Authority. In the second quarter, the company paid $59 million stock dividend to Class C shareholders, and the diluted earnings per share for Class C shares was $0.15, while realized diluted loss per share for Class A and B reached $0.12 per share.
The company reiterated its guidance of 2016 based on the results. The company estimated that net revenues would be around $4.925 billion, increasing 24% year-over-year, and operating income would be between $440 million and $445 million, rising 8%-9% compared the same period last year.
The company said that it would cooperate with Kohl's Corporation, and start selling in Kohl’s department stores beginning in 2017 to increase its distribution. The company also planned to move into the former FAO Schwarz store located on the Fifth Avenue in New York City. The toy store left last year because of the expensive rent fee, which reached $2,980 per square foot in the second quarter of 2016.