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`Under Armour's (UA) CEO Kevin Plank On Q1 2015 Results Earnings Call Transcript | Seeking Alpha
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`Seeking Aipha“
`
`Under Armour's (UA) CEO Kevin Plank On Q1 2015
`Results Earnings Call Transcript
`
`Under Armour, Inc. (NYSE:tJA)
`
`Q1 2015 Earnings Conference Call
`
`April 21, 2015, 8:30 am ET
`
`Executives
`
`Tom Shaw Director, IR
`
`Kevin Plank Chairman & CEO
`
`Brad Dickerson COO & CFO
`
`Analysts
`
`Matt McC|intock Barclays
`
`Kate Mcshane Citigroup
`
`Jay Sole Morgan Stanley
`
`Omar Saad Evercore ISI
`
`Dave Weiner Deutsche Bank
`
`Lindsay Drucker Mann Goldman Sachs
`
`Operator
`
`Good day ladies and gentlemen and welcome to the Under Armour First Quarter Earnings Webcast and Conference
`Call. At this time, all participants are in a listen only mode. Later, there we will be a question and answer session and
`instructions will follow. [Operator Instructions]. As a reminder, today's call is being recorded.
`
`I would now like to turn the conference over to Tom Shaw, Director of Investor Relations. Sir, you may begin.
`
`Tom Shaw
`
`Thanks. Good morning to everyone joining us today's first quarter conference call. During the course of this call, we'll
`be making projections or other forward looking statements regarding future events or the future financial performance
`of the company. We wish to caution that such statements are subject to risks and uncertainties that could cause actual
`events or results to differ materially. These risks and uncertainties are described in our press release and in the Risk
`Factors section of our filings with the SEC. The company assumes no obligation to update forward looking statements
`to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of
`unanticipated events.
`
`In addition, as required by Regulation G, we need to make you aware that during the call we will reference certain non
`GAAP financial information specifically currency neutral net revenue growth. We provide a reconciliation of this non
`GAAP financial information in our earnings release a copy of which is available on our website at uabi2.com.
`
`Joining us on today's call will be Kevin Plank, Chairman and CEO; followed by Brad Dickerson, our Chief Operating
`Officer and CFO, who will discuss the company's financial performance for the first quarter and provide an update to
`our 2015 outlook. Afterthe prepared remarks, Kevin and Brad will be available for a Q&A session that will end at
`approximately 9:30 a.m. Finally, a replay of this teleconference will be available at our website at approximately 11:00
`am. Eastern Time today.
`
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`And with that I'll turn it over to Kevin Plank.
`
`Kevin Plank
`
`I want to start this morning with some math. There are 1,696 players in the
`Thanks, Tom and good morning everyone.
`NFL and there is only one Super Bowl MVP. There have been hundreds of skiers in the Women's Alpine Circuit since
`2004 but just one has won 67 times. There are 450 players in the NBA and there is at least in my mind just one MVP.
`There are 125 players on the PGA Tour and there is only one Masters Champion.
`
`The numbers associated with the recent performances of Under Armour athletes like Tom Brady, Lindsey Vonn,
`Stephen Curry, and most recently Jordan Spieth, are compelling and true evidence that we are just getting started.
`
`Three months ago we talked to you about some of the important numbers Under Armour achieved in 2014. So far in
`2015, we put some equally impressive numbers on the scoreboard. First, there were acquisitions of MyFitnessPal and
`Endomando, which combines our existing MapMyFitness and UA record platforms, creates the world's largest digital
`health and fitness community now with over 130 million unique users.
`
`We opened our Chicago Brand House, 30,000 square feet of Magnificent Mile with the best presentation of the Under
`Armour brand experience anywhere in the world.
`
`We opened a store in the Mall of America, bringing the Under Armour brand to more than 40 million shoppers
`annually.
`
`We signed Sao Paulo Futebol Clube, Brazil's most successful club with 18 overall titles and more than 17 million
`supporters in that market.
`
`And with the results from our first quarter, we've now recorded 20 consecutive quarters of 20 plus percent revenue
`growth, that's five years since our last quarter with less than 20% revenue growth or to put it more topically back before
`Jordan Spieth had his drivers license.
`
`Bur without question, the most impressive performances were put together by the Under Armour athletes I mentioned
`earlier. So indulge me for a minute while I talk about these record setting performances from Under Annour athletes so
`far in 2015.
`
`Tom Brady won his fourth Super Bowl Ring and his third Super Bowl MVP Award. Lindsey Vonn broke the record for
`most carrier Alpine Skiing Women's World Cup wins. Stephen Curry the league's most unguardable player led his team
`to the best record in the NBA and is my choice to win the NBA's MVP Award when it's announced shortly, as well as
`having been the leading vote getter at the MVP All Start Game.
`
`Jordan Spieth a record setting perfonnance at the Masters where he became the first player to win wire to wire since
`1976. He reached 19 under, which no one had ever done in the history of the tournament. Set the record for most
`birdies at one Masters with 28 and became only the second man in a hundred years to win a major wire to wire at 21
`years or younger.
`
`Equally important, Jordan dominated those four days at the Masters, with the sense of purpose and will that define
`both him and Under Armour. Part of the formula for success in our business is making a big bet and we did so when
`we signed Jordan as a teenager, a few years ago.
`
`To quote the great Dodgefis Executive, Branch Rickey, luck is the residue of design and knowing that we have Jordan
`Spieth as the face of Under Annour Golf into the future, solidifies our presence in the category, and aligns us with a
`new face of Golf in the United States. We're proud to be associated with athletes like Tom, Lindsey, Stephen, and
`Jordan, not just because of their accomplishments, but especially, because the people that they are.
`
`The great performances of these athletes are driving sales force too. We had a great launch at the Curry One at the All
`Star Game in February and there is tremendous buzz in the sneaker community about that shoe as well as great
`anticipation already around the Curry Two. So while it feels good to be viewed as a growing presence in the signature
`shoe market, it's important to recognize that we are just getting started.
`
`In golf apparel, our team did a great job of outfitting Jordan for the Masters and it provided terrific visibility for our golf
`apparel and footwear. When we signed him. we knew he had the ability to help drive our brand, beyond just golf, and
`that we needed to align our product stories with his aggressive, young, and fearless personality.
`
`We come a long way in the category in the last two years, and because we know that every detail matters. It was nice
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`to be able to put him in that blue polo on Sunday, knowing how great it would look wearing a Green Jacket.
`
`Moving on other areas of our business that continue to shine, we saw 41% growth in our footwear business this past
`quarter. In addition to the heat being generated in basketball by the Curry One, our SpeedForm Gemini running shoe
`at $130 continued to collect great reviews in check at retail.
`
`Building off the success of our SpeedForm platform, we're introducing cleated models in both American and global
`football, including the boot worn by one of our newest athlete, Memphis Depay, the top scorer in the Dutch League
`who helped his team clinch first place, Saturday, with a spectacular free kick, and who at only 21 years old may soon
`become one of the most exciting players in the beautiful game.
`
`We continue to see strength in our core apparel business, with revenues up 21% in the quarter, the 22nd consecutive
`quarter of 20 plus percent apparel revenue growth, our largest category.
`
`In addition to our strength in golf, we are off to a strong start with the introduction of Armour, our reengineered base
`layer featuring enhanced ventilation. As we grow our presence in key footwear categories, like running and basketball,
`it's helping drive our business in those key growth categories across all men's and women's apparel. Our growing
`strength in footwear is also helping to drive apparel sales with kids, as we understand how critically important the
`footwear piece is to how our young male and female consumers dress.
`
`Our financial results are great evidence of the growing power of the Under Armour brand and our ability to execute
`against this tremendous opportunity. But operationally, we believe we have yet to play our best game. We believe
`there is a great opportunity to improve both how our supply chain gets product to market, and how our product looks
`once we get there.
`
`On the latter, our growing pipeline of innovation in footwear, apparel, accessories, and Connected Fitness, provides us
`with the opportunity to evolve our model by providing better merchandizing to our wholesale partners, as well as in our
`own direct consumer businesses. We are adding human capital to our global merchandizing function, starting with
`Kevin Eskridge, who will run our global merchandizing team after two and plus years successfully establishing our
`brand in China.
`
`The Under Armour brand will continue to grow by ensuring we show up in a premium way whenever our consumer
`interacts with our brand, whether that's in a wholesale partner store, our own doors, and e commerce environment or
`anywhere our brand is available.
`
`Our ability to stratify our presentation at retail with multiple end use categories is an asset we have yet to fully
`maximize, and we believe these types of surgical improvements in our merchandising will help ensure our continued
`growth with our wholesale partners.
`
`In our DTC business, we are laser focused on using our Brand House stores to provide that elite presentation of the
`Under Armour brand. That presentation is on display at our newest 30,000 square foot Brand House store on the
`Magnificent Mile in Chicago, where we've dedicated space for men's and women's, running, golf, basketball, hunt,
`studio, and use, as well as the presentations of local assets like Notre Dame, Northwestern, The Cubs and White Sox.
`It's also our first opportunity to bring our Connected Fitness story to our consumer and we will evolve that experience
`as we continue to develop our Brand House presence.
`
`Our Connected Fitness community added over 10 million unique users since our last call in February and now totals
`more than 130 million combined.
`
`We average more than a 130,000 people in the first quarter downloading one of our four apps.
`
`We are focused on integrating the core companies and continued development of the individual apps as we build out
`the Under Armour record platform.
`
`To build on this, we are expanding our partnership with SAP for the infrastructure that will help us create a single
`integrated view of our consumer. We believe the brand that can build true communities among our consumers by
`improving their health and fitness will be best positioned and we are focused on the competitive advantage we enjoy by
`having the world's largest digital health and fitness community.
`
`The final piece I want to cover today is our fastest growing business, international, where we grew 74% this past
`quarter. We continue to show great strength as the Under Armour brand establishes itself as an authentic athletic
`brand in new markets. We will add over 100 total stores outside the United States in 2015, and this past quarter we
`opened our first stores in Abu Dhabi and Brazil. Next month, we will be in Brazil to unveil the kit for our newest team,
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`Séo Paulo Futebol Clube, the most successful club in the country's history. Adding key assets like Sao Paulo
`accelerates our presence in these new markets and helps us deliver authenticity as we establish ourselves in global
`football.
`
`And finally on international, we are most excited about the fact that we are just getting started. I mentioned earlier that
`we are bringing our former GM in China back to run our global merchandising team. Taking over as our new GM in
`China is Eric Haskell, who brings extensive industry expensive in the country as he leads what will be one of our largest
`countries in revenue outside North America by the end of 2015.
`
`So, whether it was football cleats and we entered that market, Golf with Jordan Spieth, for Basketball with Stephen
`Curry, we consistently proven our ability to go hard and disrupt key categories which we believe positions us as the next
`grade global athletic brand. And with the additional asset of our Connected Fitness platform, we believe, we can do so
`in a way that connects us to our consumer like no other brand in the planet. We are trutyjust getting started.
`
`And with that, I'll turn it over to Brad.
`
`Brad Dickerson
`
`Thanks, Kevin. And I'll just spend some time discussing our first quarter results, followed by updated outlook for 2015.
`Our net revenues for the first quarter of 2015 increased 25% to $805 million. As Kevin highlighted our results
`represented 20th straight quarter achieving above 20% top line growth. We are proud of this consistency particularly in
`a period where several external headwinds, including the strong U.S. dollar negatively impacted our business.
`
`in addition, our North American business
`On a currency neutral basis net revenues increased 27% for the period,
`experienced some disruptions from the West Coast port delays and weather related store closures during the period
`which we estimate had a 1% to 2% cumulative impact on overall net revenues.
`
`Looking at our product categories we grew apparel net revenues 21% to $555 million compared to $459 million in the
`prior year's quarter. Despite the impact of some of the headwinds I just outlined, we were able to post strong results in
`our largest product category, led by the introductions of Armour Base Layer and our updated training platform, as well
`as continued growth in Golf and running.
`
`First quarter footwear net revenues increased 41% to $161 million from a $114 million in the prior year representing
`20% of our total business for the first time since our initial running shoe launch in early 2009. As the centerpieces of
`our first brand holiday of 2015, our new SpeedForm Gemini and Apollo Event running shoes, as well as Stephen
`Curry's first signature basketball shoe, the Curry One, drove tremendous excitement for the category in the
`marketplace.
`
`Our accessories net revenues during the first quarter increased 23% to $63 million from $52 million last year with
`particular strength within our bags line. Our global direct to consumer net revenues increased 21 % for the quarter
`representing approximately 25% of net revenues. The e commerce growth rate exceeded our retail growth rate during
`the quarter with weather driving store closures for several of our domestic doors during the quarter. Nevertheless, we
`were excited with the retail progress we made during the quarter,
`including strong new Brand House openings in
`Chicago on the Magnificent Mile, and in Minneapolis at the Mall of America, as well as our first Brand House store in
`Brazil.
`
`From a global standpoint we ended the first quarter with 153 owned stores, including a 134 factory house stores and
`19 brand house stores compared to a 134 owned stores in the year ago period comprised of a 123 factory house stores
`and a 11 brand house stores.
`
`In our e commerce channel we continue to see strong overall trends as our consumer continues to shift to mobile which
`represented over 40% of our traffic and nearly 20% of our e commerce sales during the period. At the same time, we
`are seeing a strong response to our new local e commerce sites including the first quarter launches in the Philippines
`and the Netherlands, which we believe is indicative of some of the untapped demand in these markets.
`
`Looking at our regions, North America net revenues increased 20% to $700 million in the first quarter compared to
`$538 million in the prior year's quarter. On a currency neutral basis North America net revenues increased 21% for the
`period primarily by growth in the apparel and footwear categories and in our direct to consumer channel as I just
`outlined.
`
`International net revenues increased 74% to $96 million in the first quarter and represent 12% of total net revenues.
`On a currency neutral basis international net revenues increased 86% for the period. This was the first quarter in Under
`Arrnour's history where the international mix surpassed 10%.
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`In the EMEA region in addition to our strong launch of our new Dutch website, we celebrate the opening our new office
`in Germany, which puts us closer to our customers at a time when we are beginning to see strong traction within the
`market. We were also just beginning our new distributor agreement in the Middle East which included the January
`opening of our first regional Brand House store in Abu Dhabl.
`
`In Asia Pacific we more than tripled our business in China, as we began to accelerate our partner store expansion
`efforts and experience significant traction across e commerce. We also remain in the early stages of our expansion
`efforts in Southeast Asia, Taiwan, and Hong Kong.
`
`in Latin America, we are still less than a year into our market entry in Brazil, and we are seeing success
`Finally,
`building brand awareness with efforts such as our recent signing of Sao Paulo Futebol Clube, the opening of our first
`Brand House store in Sao Paulo, and a local marketing push in conjunction with our SpeedForrn Gemini launch.
`
`Moving on to margins. First quarter gross margins held steady year over year at 46.9% with three primary factors
`contributing to this performance during the quarter. First, favorable product margins in both North American and
`international apparel and footwear benefited gross margins by approximately 110 basis points for the period.
`
`Second, higher airfreight cost primarily tied to our efforts to mitigate the impacts of the West Coast port disruptions
`negatively impacted gross margins by approximately 60 basis points in the period.
`
`Finally, the strengthening of the U.S. dollar negatively impacted gross margins by approximately 50 basis points for the
`period as we purchased the majority of our inventory for international businesses in U.S. dollars.
`
`Selling general administrative expenses as a percentage of net revenues deleveraged 80 basis points to 43.5% in the
`first quarter of 2015, from 42.7% in the prior year's period. Starting this quarter in an effort to simplify and streamline
`our conversation we are consolidating our SG&A detail into two primary buckets: marketing and other SG&A. Other
`SG&A is the sum of our previously outlined selling, product innovation and supply chain, and corporate services
`buckets.
`
`SG&A details for the first quarter are as follows: Marketing cost decreased to 13.4% of net revenues forthe quarter
`from 13.7% in the prior year period driven primarily by the shift of certain planned expenditures to later in 2015. Other
`SG&A costs increased to 30.1% of net revenues for the quarter from 29% in the prior year, driven primarily by our
`Connected Fitness acquisitions and investments in Brand House and e commerce. The one time deal closing cost of
`$6.3 million forthe Connected Fitness acquisitions negatively impacted the quarter by approximately 80 basis points.
`
`Operating income for the first quarter increased 3% to $28 million, compared with $27 million in the prior year period.
`
`Interest and other expense for the first quarter increased to $4 million, compared with $2 million in the prior year
`period, primarily reflecting increased interest expense associated with the financing of our Connected Fitness
`acquisitions.
`
`Our first quarter tax rate of 50.3% was unfavorable to the 46.1% rate last year, primarily driven by increased losses in
`our newer Latin American businesses. Discrete tax items such as international losses are particularly impactful to our
`effective tax rate in period such as first quarter with lower consolidated pretax income levels.
`
`Given these factors below the operating line, our first quarter net income decreased 13% to $12 million, compared to
`$14 million in the prior year period, while our diluted earnings per share decreased to $0.05 from $0.06 in the prior
`years period.
`
`On the balance sheet, total cash and cash equivalents forthe quarter increased 29% to $232 million, compared with
`$180 million at March 31, 2014.
`
`Inventory for the quarter increased 22% to $578 million, compared to $472 million at March 31, 2014.
`
`Total debt increased to $677 million as compared to $152 million at March 31, 2014, and $284 million at December
`31, 2014. The first quarter increase reflects the financing of our Connected Fitness acquisitions, including $250 million
`on our revolving line of credit and additional $150 of term debt.
`
`Looking at our cash flows, our investment and capital expenditures was $68 million for the first quarter compared to
`$31 million in the prior year's period, driven primarily by our investments in our new North American distribution center,
`our corporate headquarters in Baltimore, and our global fixturing and retail strategies.
`
`Now moving on to our updated 2015 guidance. Based on current visibility, we expect 2015 net revenues of
`
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`approximately $3.78 billion representing growth of 23%, and 2015 operating income in the range of $400 million to
`$408 million representing growth of 13% to 15%. Our operating income guidance includes the dilutive impact of the
`Connected Fitness acquisitions consisting of $6.3 million of one time transaction cost incurred in the first quarter, as
`well as full year operating losses from these businesses, and non cash amortization charges of the intangible assets
`generated from the acquisitions.
`
`Below operating results, we estimate $9 million increase year over year in interest expense, primarily due to
`incremental borrowings under our credit agreement to fund the Connected Fitness acquisition.
`
`We currently expect a full year effective tax rate of approximately 41%, which is higher than previously anticipated
`given the continued strengthening of the U.S. dollar, which negatively impacts our international profitability, which in
`turn negatively impacts our consolidated tax rate. As this impact is more pronounced in quarters with lower
`consolidated pretax profits, our guidance assumed a second quarter tax rate similar to ourfirst quarter rate followed by
`a more normalized effective tax rate expected in the back half of the year.
`
`I'd also like to add some color on several items, starting with revenues. As we indicated last quarter, and as reflected in
`our first quarter results, international and footwear are areas that are planned to outperform in 2015, as we continue to
`enter and expand in new markets and see successes across our footwear line. From a macro standpoint the
`strengthening of the U.S. dollar is expected to impact our 2015 net revenues by approximately 2 percentage points to 3
`percentage points given current exchange rates, and we have factored this into our updated guidance.
`
`Now looking at gross margins. Given the continued strengthening of the U.S. dollar along with anticipated higher
`ongoing airfreight needed to service to our customers, we now expect full year gross margin will be roughly in line with
`last year's 49% rate. This compares to our prior guidance of a modest year over year improvement. Specifically, we
`expect our second quarter and third quarter margins will be down approximately 50 basis points compared to last year.
`We continue to plan for higher airfreight expenses in the second quarter as we continue our efforts to mitigate the
`impact of the West Coast port disruptions, while the negative impact of the stronger U.S. dollar is expected to have the
`most pronounced margin impact in the second and third quarters.
`
`In SG&A, the timing of certain expenses has resulted in some changes to our quarterly cadence. Given our current
`visibility, we now expect SG&A expense deleverage of approximately 200 basis points during the second quarter,
`including higher costs associated with our Brand House strategy, given the timing of store openings, as well as the
`timing of certain marketing and innovation expenditures, We anticipate SG&A will continue to deleverage albeit to a
`lesser degree during the third quarter before showing modest leverage during the fourth quarter.
`
`From an operating income standpoint, while the gross margin headwinds have increased since our previous guidance,
`we have seen some offsetting impacts from our Connected Fitness acquisitions, primarily related to lower amortization
`expense than previously anticipated. In addition, we continue to expect to mitigate some of the overall margin
`pressures through targeted improvements in gross margin and SG&A, with the largest offset emerging in the fourth
`quanen
`
`Finally some updates on our planned capital expenditures. We had previously indicated planned 2015 capital
`expenditures in the range of $280 million to $290 million inclusive of approximately $90 million for our new domestic
`distribution center and the expansion of our corporate headquarters in Baltimore.
`
`Following our recent acquisitions in the Connected Fitness space we began looking into areas of integration tied to our
`overall business. An important first step is our technology platform. As such, we've decided to invest in our systems
`with SAP to enhance, expand, and integrate our core apparel and footwear systems, along with our Connected Fitness
`platforms. This project will occur over the next few years with the initial phases occurring in 2015. As a result we now
`expect 2015 capital expenditures in the range of $330 million to $340 million.
`
`We would now like to open the call for your questions. We ask that you limit your question to two per person so we can
`get to as many of you as possible. Operator?
`
`Question and Answer Session
`
`Operator
`
`Thank you. [Operator Instructions].
`
`Our first question is from Matt Mcclintock of Barclays. You may begin.
`
`Matt Mcclintock
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`in your prepared remarks you talked about merchandising improvements and supply chain improvements. I
`Kevin,
`wondered if you could focus a little bit more on the supply chain improvements. What are you doing in regards to
`working with your supply chain to make it more efficient going forward?
`
`Kevin Plank
`
`Well I think a couple of things we've done is just from an organization standpoint the way we structure it. So Brad, as
`you know, has taken on additional responsibilities in making shuffling some things around. Well we prioritize footwear
`and I've moved Kip and have him exclusively focused on footwear and innovation, and I think it's really going to be a
`driver for the company with what you'll see coming out as we see this massive opportunity in footwear.
`
`At the same time, the supply chain particularly as you get more complex particularly as you look to grow globally it's
`incredibly complex. And frankly for us much further beyond what we were just making, we used to sell tight T shirts and
`we'd put them in sporting good stores and they would sell and now it's a much more complex and diverse line and you
`have things like women's that includes fashion and flow and all these other pieces that come to bear. Doing business
`with other markets is incredibly sophisticated and difficult as well. We just opened orjust broke around rather a few
`months ago, a new distribution facility down in Tennessee, and things like that that are happening and taking place for
`us.
`
`When I wanted us to come across frankly a bit deprecating forthe company in terms of we just think we can do better.
`We're incredibly proud I think of the results that we put on the paper and what we've done particularly from an apparel
`standpoint with 22 consecutive quarters and approaching the growth that we have. But as I said, we had yet to play our
`best game.
`
`So I don't think that what Brad is building out with our team and Jim Hardy who has been our Chief Supply Chain
`Officer here for the last several years, and bringing to bearthe expertise. I can tell you what we're doing physically with
`warehouses and some of the other components but also systems are going to play a massive role in where we're
`heading.
`
`One of the things I also mentioned was our new partnership with SAP, who Bill McDermott has been on our board for
`last nine or nearly 10 years. And so we've had a lot of insight into what running what best
`best run companies do and
`what they look like. And I think we're now in a position that we're big enough to be able to implement that but not too
`big where it will actually be a hindrance to the company. So i think there is a renewed figure is that what we've done
`to date is
`has been good. And we've done well. But we're just looking and saying from a company that now has a
`focus on things like women's wear, we're looking to turn product every three and four weeks versus having two seasons
`a year.
`
`in Southeast Asia, in Latin America, around
`Doing business and truly having distribution facilities in Europe, in Asia,
`the world, and figuring out those complicated supply chains that include things like duty and tariff and all that
`those
`other issues, it's just
`it's becoming a much more complicated world and we're elevating ourselves. And so Brad is
`moving away from the CFO which of course will continue to report to him is part of the challenge with closing on $4
`billion or close to $2 billion in FOB this year, gross margin moving few bps let alone percentage point or two has a
`massive impact in the company.
`
`And so we think that we've done well, we think that we've been probably a little fat in getting to this point, and we're
`just looking and recognizing the fact that if we begin to tighten the belt and bring in professionals, this is not like
`finding a new designer where you're hoping someone can do the job, there is lots of people that have this expertise
`and experience from some of the fast fashion people that are great to learn from as well as we can implement
`ourselves. And so I think what you're seeing is the company growing up.
`
`And the last thing I'll just say is around the merchandizing function. We did not have a merchandising function in the
`organization. And I say that from, we had product people that build product, and we had sales people that sold it in,
`and then the buyers would select what they wanted, but truly curating and articulating exactly the voice that we want
`depending on the distribution is not a function that we had as a company. And so what you're seeing I believe is a
`more sophisticated Under Armour, and at the end of the day I think we're going to have a better and result for our
`consumer first and foremost that continue to drive the kind of results that I thin