Under Armour CEO Kevin Plank, bolstered by fourth-quarter and year-end revenue numbers that exceeded projections, made bold promises about the future of his Baltimore-based company during its fourth-quarter earnings call Thursday.
Amid a reorganization of the footwear department and questions about how the sector was performing, Plank laid out a plan to continue building profit by focusing on shoe sales and through short, intense bursts of marketing meant to better spread word about new products. He said advanced technology that athletes have used to monitor their workouts will finally come to the retail market in 2013.
"The aggressive diversification of our business will continue. In fact, we will be even more aggressive in 2013," Plank said. "Most importantly, we will speak with a louder brand voice than at any point in our history."
Plank also used the call to make his Super Bowl prediction, jumping in at the end to say, "Wait, Ravens 35-33. Final prediction. Go Ravens."
Under Armour announced fourth-quarter revenue of $506 million, up 25 percent over the same period in 2011. The company revealed full-year revenue of $1.835 billion, a 25 percent increase from 2011.
Under Armour generated $403 million, or $0.31 per share, in the fourth quarter of 2011. It earned $0.48 per share in 2012.
Analysts surveyed by Bloomberg had predicted revenue of $498 million and $0.46 per share for the fourth quarter of last year.
Some analysts had been skittish on Under Armour's stock because the warm start to the winter could have stunted sales of cold-weather gear. But the company eased those fears by evolving its product lines, said Sharon Zackfia of William Blair & Co.
"It's really more of a sigh of relief for investors," she said. "They've managed to become a-seasonal."
Under Armour's net income in the fourth quarter grew to $50 million, a 50 percent increase over the final three months of 2011. For the year, net income reached $129 million, up from $97 million in 2011. The company's net revenue has grown by at least 20 percent in each of the past 11 quarters.
Apparel still generated the vast majority of Under Armour's revenue in the fourth quarter, bringing in $405 million, but Plank emphasized the potential for growth in footwear.
"We are building a footwear culture that will ensure we are in position to fight for market leadership in every athletic footwear category," he told investors and analysts.
The company announced last week that its vice president of footwear would be leaving, and Plank made a point of emphasizing his decision to move co-founder Kip Fulks into a role overseeing footwear operations. Plank said the company, which has found traction with its line of cleats but struggled in other areas, expected growth in the large, lucrative running and basketball markets.
A new store in Harbor East that Plank called "the ultimate expression of the Under Armour brand" appears to be setting the course for much of what the company hopes to accomplish this year. Footwear will occupy the center of the store.
"We're the ones who need to take the lead in making that bold statement that we are a footwear brand," Plank said.
The Baltimore specialty store will devote equal floor space to women's apparel — a nod, Plank said, to strong reception of new product lines and advertising campaigns directed at women.
While Plank dismissed the notion of the Harbor East store becoming the company's flagship, he said it would serve as a sort of lab for determining what works best in reaching consumers.
The introduction of Armour39 represents the culmination of Plank's desire to develop technology that would evaluate the quality of an athlete's workout. Based on technology that debuted in February 2011, Armour39 is a strap worn around the chest that includes an embedded computer capable of monitoring the wearer's heart rate and breathing.
Plank called it a "first-of-its-kind performance monitoring system that monitors what matters most during a workout: willpower."
Under Armour has spun away from its beginnings in compression gear since going public in 2007, when it accounted for 64 percent of sales. It drove only 14 percent in 2012 as the company continued emphasizing apparel lines such as Charged Cotton and Storm Fleece.
Plank said Under Armour would focus its marketing on delivering "tighter but louder" messages, taking money that was once spread over 12 weeks and pouring it into intense two- or three-week segments he called "brand holidays."
At the close of trading Thursday, Under Armour stock had risen $2.74, to $50.87, a nearly 6 percent increase.
Plank, a former University of Maryland football player, founded the company 17 years ago by making shirts out of his grandmother's basement. He said Thursday that the company projected revenue of $2.2 billion, keeping it on pace to achieve a stated goal of double revenue from 2010 to 2013.
twitter.com/chriskormanCopyright © 2014, The Baltimore Sun