2018 Under Armour Annual Report

2 0 1 8 | A N N U A L R E P O R T

T R A N S F O R M A T I O N
2018 UNDER ARMOUR ANNUAL REPORT
JOEL EMBIIDMISTY COPELAND
JORDAN SPIETH

U
I N N O V A T I O N
2018 UNDER ARMOUR ANNUAL REPORT
UA SPEEDPOCKET™: UNDER ARMOUR’S REVOLUTIONARY
STORAGE SYSTEM KEEPS RUNNER’S ESSENTIALS STABLE UA HOVR™ INFINITE: DIGITALLY CONNECTED, ZERO GRAVITY FEEL
ANTHONY JOSHUA:
WORLD HEAVYWEIGHT CHAMPION;
UA RUSH APPAREL
STEPHEN CURRY:
3X NBA CHAMPION & 2X NBA MVP;
CURRY 6 FEATURING UA HOVR TECHNOLOGY

2018 UNDER ARMOUR ANNUAL REPORT
To Our Shareholders,
2018 was a productive, evolutionary year for Under Armour –
one that demonstrated measured progress against our strategic,
operational and cultural transformation.
Amid our focus on executing against a number of business
åêåðåÝðåòáïëñîğêÝêßåÝèìáîâëîéÝêßáàáèåòáîáàÝãÝåêïðëñî
expectations. Revenue grew 4 percent to reach $5.2 billion
including balanced growth from our wholesale and DTC
businesses, which were up 3 percent and 4 percent, respectively.
Our international business was up 23 percent led by continued
ïðîáêãðäåêÇÏÇÃÝêàÃïåÝÒÝßåğßÝêàÐëîðäÃéáîåßÝàáßèåêáà
2 percent as we executed against inventory management
initiatives designed to better position ourselves for operating
áġßåáêßåáïÝêàâñðñîáãîëóðäÑñîâñèè™õáÝîãîëïïéÝîãåêóÝï
unchanged from the prior year at 45.1 percent, or up 30 basis
points to 45.5 percent on an adjusted basis, which excludes the
åéìÝßðïëâëñîîáïðîñßðñîåêãáĞëîðï
We also made progress with respect to SG&A expenses which
were up 4 percent in 2018, following 14 percent growth in 2017
and 22 percent growth in 2016. Adjusted operating income was
$179 million, or a $25 million operating loss on a GAAP basis.
Adjusted diluted earnings per share of $0.27 represented a 42
ìáîßáêðåêßîáÝïáõáÝî™ëòáî™õáÝîóäåßäëêÝÉÃÃÒÞÝïåïóÝï
$0.10 of diluted loss per share.
ÄáõëêààáèåòáîåêãëêëñîğêÝêßåÝèëÞæáßðåòáïðäáîáóáîáðäîáá
main strategies we executed against in the second year of our
ðäîáá™õáÝîðîÝêïâëîéÝðåëêÝßèÝîåğáàâëßñïëêëñîìñîìëïá
mission and vision; a renewed consumer centric approach; and,
ÝßëéìèáðáëòáîäÝñèëâëñîãë™ðë™éÝîçáðìîëßáïï
First, is our brand promise which is to inspire, enable and
empower human performance through innovative athletic
products and compelling experiences. It’s our past, present and
future – an emphasis we believe will prove to be our greatest
strength. And it’s this relentless pursuit of advancing athletic
ìëðáêðåÝèðäÝðñêàáîïßëîáïëñîòåïåëêðëåêïìåîáõëñóåðä
ìáîâëîéÝêßáïëèñðåëêïõëñêáòáîçêáóõëñêááàáàÝêàßÝêĊð
imagine living without. In this pursuit, Under Armour’s mission is
ðëÏÝçáÛëñÄáððáî
In 2018, we delivered on our promise, vision and mission. Within
ÝììÝîáèóáïÝóßëêðåêñáàïñßßáïïóåðäçáõðáßäêëèëãåßÝè
ÝàòÝêßáéáêðïèåçáÔáÝßðëîÝêàÖäîáÝàÞëîêáÝïóáèèÝïïðîëêã
óåêïåêáôßèñïåòáëĞáîåêãïèåçáÒîëæáßðÔëßçÝêà×êïðëììÝÞèá
driving newness, innovation, and style to our consumers through
ïäÝîìáîïáãéáêðÝðåëêÝêààåĞáîáêðåÝðåëê
Our footwear business also saw a major evolution with the
launch of our new cushioning platform – Under Armour HOVR
starting in running with the Sonic and Phantom styles and
áôìÝêàåêãðëÞÝïçáðÞÝèèóåðäðäáÊÑØÔÊÝòëßÃààåðåëêÝèèõ
the Curry 5, Curry 6, Breathe Lace and Forge96 continued
to authenticate our unique value proposition of meaningful
innovation coupled with style and a strong design point of view.
ÕáßëêàâëèèëóåêãÝêåê™àáìðäãèëÞÝèïáãéáêðÝðåëêïðñàõ
óáåàáêðåğáàëñîßëîáßëêïñéáîðëàáğêáëñîëòáîÝèèéÝîçáð
opportunity, strengthen our brand position and truly understand
how to maximize the emotional and functional expectations
ëâãèëÞÝèÝðäèáðáïÃððäåïóáèè™åêâëîéáàÝêàÝîðåßñèÝðáà
intersection of demand centric growth and a consumer’s
àáßåïåëêæëñîêáõóáêëóäÝòáÝßèáÝîìèÝõÞëëçîëëðáàğîéèõåê
S H A R E H O L D E R | L E T T E R

2018 UNDER ARMOUR ANNUAL REPORT
• Delivering balanced, sustainable earnings growth through
éÝîãåêáôìÝêïåëêßëïðáġßåáêßåáïÝêàåêòáïðéáêðåê
strategic growth initiatives to drive consistent shareholder
return.
As we turn the corner into 2019, we remain resolute in
Protecting This House – the Under Armour brand – and
åéìèáéáêðåêãïðîÝðáãåáïðëáêïñîáäáÝèðäõÞîÝêà™îåãäðãîëóðä
With a stronger foundation and greatly improved execution
ability, we are gaining momentum and earning every moment,
experience and engagement with our consumers, customers
and shareholders.
ËêßèëïåêãëñîëìáîÝðåêãéëàáèåïóëîçåêãÝêàóáÝîá
ßëééåððáàðëëñîèëêã™ðáîéïðîÝðáãåßìèÝêÙáÝîáåê
command of our business and actively applying the lessons
we’ve learned by capitalizing on our strengths to optimize
the numerous opportunities ahead for Under Armour. I am
incredibly proud of what we have accomplished throughout
ðäåïðîÝêïâëîéÝðåëêÒëóáîáàÞõÝóëîèà™ßèÝïïìÝïïåëêÝðá
éÝêÝãáéáêððáÝéšîñêêåêãÝéÝîçáàèõéëîáàáèåÞáîÝðáéëàáè
– we are running hard toward solidifying ourselves as one of the
óëîèàĊïãîáÝðáïðÝðäèáðåßìáîâëîéÝêßáÞîÝêàï‘ÙáÙåèè
ÍáòåêÃÒèÝêç
ÅäÝåîéÝêÝêàÅäåáâÇôáßñðåòáÑġßáî
ÝðäèáðåßìáîâëîéÝêßááêãåêááîáàðëàîåòáïñïðÝåêÝÞèáìîëğðÝÞèá
growth.
ÖäåîàÝïìÝîðëâëñîàåïßåìèåêáàëìáîÝðåêãéëàáèóáðëëçëñî
ãë™ðë™éÝîçáðìîëßáïïâîëéÝììîëôåéÝðáèõ ðë #éëêðäï
Centered in a holistic structural and process realignment of
our category, strategy and product teams with our regional,
éÝîçáðåêãÝêàïñììèõßäÝåêâñêßðåëêïðäåïëìðåéåöÝðåëê
supports greater internal and external alignment enabling
éëîáàÝðݙåêâëîéáààáßåïåëê™éÝçåêãÝêàÞáððáîáġßåáêßåáïåê
serving our consumers and customers.
As we closed out the year, we held an investor meeting where
óáìîëòåàáàÝêåê™àáìðäëòáîòåáóëâëñîèëêã™ðáîéïðîÝðáãõÝêà
ğêÝêßåÝèéëàáèÝêàðäáçáõåêåðåÝðåòáïàáïåãêáàðëàîåòáãîëóðä
ÝêàìîëğðÝÞåèåðõëòáîðäáêáôðğòáõáÝîïÈëñêàÝðåëêÝèáèáéáêðï
ðëðäåïìèÝêåêßèñàá
• Ãïåêãèá™éåêàáàâëßñïëêåêêëòÝðåòáÝðäèáðåßìáîâëîéÝêßá
product and experiences;
• Becoming consumer centric by harnessing data science
and analytics along with the world’s largest digitally
ßëêêáßðáàäáÝèðäÝêàğðêáïïßëééñêåðõðëàîåòá
engagement, preference and consideration;
• Continuing to elevate investments toward the largest,
highest return growth opportunities including the
ßëéìÝêõĊïåêðáîêÝðåëêÝèàåîáßð™ðë™ßëêïñéáîâëëðóáÝîÝêà
women’s businesses;
• Emphasizing digital engagement and conversion, and retail
excellence;
• Protecting the brand through selective, optimal and
premium wholesale distribution; and,
S H A R E H O L D E R | L E T T E R

M O M E N T U M
2018 UNDER ARMOUR ANNUAL REPORT
DWAYNE “THE ROCK” JOHNSON
LINDSEY VONN

UNITED STATTT ES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________ ____________ ____________ _________
Form 10-K
_______________________ ____________ ____________ _______
(Mark One)
þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2018 or
̈ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 001-33202
_____________________ ____________ ____________ _________
UNDER ARMOUR, INC.
(Exact name of registrant as specified in its charter)
_____________________ ____________ ____________ _________
Maryland 52-1990078
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer
Identification No.)
1020 Hull Street
Baltimore, Maryland 21230 [phone]
(Address of principal executive offices) (Zip Code) (Registrant’s TelephoneTT Number, Irr ncluding Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Class A Common Stock New York Stock Exchange
Class C Common Stock New York Stock Exchange
(Title of each class) (Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ̈
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ̈ No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No ̈
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files. Yes þ No ̈
Indicate by check mark if the disclosure of delinquent filers pursuant to Item 405 or Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated
filer,” “smaller reporting company,”and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer þ Accelerated filer ̈
Non-accelerated filer ̈ (Do not check if a smaller reporting company) Smaller reporting company ̈
Emerging growth company ̈
If an emerging growth company, iyy ndicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ̈
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ̈ No þ
As of June 29, 2018, the last business day of our most recently completed second fiscal quarter, the aggregate market value of the
registrant’s Class A Common Stock and Class C Common Stock held by non-affiliatesff was $4,163,565,041 and $4,673,904,814, respectively.
As of January 31, 2019, there were 187,788,898 shares of Class A Common Stock, 34,450,000 shares of Class B Convertible Common
Stock and 226,515,394 shares of Class C Common Stock outstanding.
DOCUMENTS INCORPORATEDAA BY REFERENCE
Portions of Under Armour, Inc.’s Proxy Statement for the Annual Meeting of Stockholders to be held on May 9, 2019 are incorporated by
reference in Part III of this Form 10-K.

UNDER ARMOUR, INC.
ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
PART I.
Item 1. Business
General 1
Products 1
Marketing and Promotion 2
Sales and Distribution 3
Seasonality 4
Product Design and Development 4
Sourcing, Manufacturing and Quality Assurance 5
Inventory Management 5
Intellectual Property 6
Competition 6
Employees 6
Available Information 7
Item 1A Risk Factors 8
Item 1B Unresolved Staff Comments 21
Item 2 Properties 22
Item 3 Legal Proceedings 22
Executive Officers of the Registrant 22
Item 4 Mine Safety Disclosures 24
PART II.
Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities 25
Item 6 Selected Financial Data 27
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 28
Item 7A Quantitative and Qualitative Disclosures About Market Risk 45
Item 8 Financial Statements and Supplementary Data 47
Item 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 84
Item 9A Controls and Procedures 84
Item 9B Other Information 84
PART III.
Item 10. Directors, Executive Officers and Corporate Governance 85
Item 11 Executive Compensation 85
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters 85
Item 13. Certain Relationships and Related Transactions, and Director Independence 85
Item 14. Principal Accountant Fees and Services 85
PART IV.
Item 15. Exhibits and Financial Statement Schedules 86
Item 16 Form 10-K Summary N/A
SIGNATURES 89