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.

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 uabiz.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. After the 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 a.m. Eastern Time today. And with that I'll turn it over to Kevin Plank.

Thanks, Tom and good morning everyone. I want to start this morning with some math. There are 1,696 players in the 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 São 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 driver's license. Bur without question, the…

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. On a currency neutral basis net revenues increased 27% for the period. In addition, our North American business 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…

Thank you. [Operator Instructions]. Our first question is from Matt McClintock of Barclays. You may begin.

Kevin, in your prepared remarks you talked about merchandising improvements and supply chain improvements. I 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?

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 or just 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 for the 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…

Sounds great. Thanks a lot, Kevin.

Thank you. Our next question is from Kate McShane of Citigroup. You may begin.

Hi, thanks good morning. I was wondering if we could hear a little more about your women's business. Can you update us on the performance of the category and have some of the expansion that we've seen within just women's in general and the department store and some of the supporting goods stores helps the overall brand?

Well, Kate, I think first of all we see that general trend toward athletic in women's fashion as a whole is something that we don't see it slowing any time soon and we're very fortune for that, I think being the heart and soul of it. Beginning going back to 2014, we are incredibly proud, I believe the conversation that we kicked off with our will what I want campaign that began with Misty Copeland and that aspirational commercial that we had with Misty and then following up with Gisele. That -- the momentum from that is something that we're still feeling today, and capping off last week with Misty being named one of Time Magazine's 100 most influential people on the planet. So I think we are having a bigger conversation than even what is the style color that's in the store. At the end of the day though that is what we do for a living and we are looking at how the style color hits in the store. I am not sure that we have taken full advantage of the conversation we started from a product merchandising standpoint, and we believe that there is a greater opportunity for us in women's to have a conversation with her that is meeting her where she is versus asking her to come to us. And we articulated that last year with this idea of the athletics, the female athlete versus the athletic female. And so I think you'll continue to see styles and silhouettes and speaking about Under Armour, we basically build our women's business on the back of compression shorts and sports bras. And where we are trying to show up in more places for and be more relevant beyond just strictly in the gym or what she is…

That's very helpful. Thank you. And then if I could ask one follow-up question on international, specifically Europe. Can you give us any more detail on where you are today in terms of distribution versus where you were last year at this time whether it would be types of retailers or countries that you're in versus last year?

Let me take a crack and may be Brad can help on the back of that too. So we're -- we really had breakthrough year in 2014 and again like most things that came down to leadership. We struggled for a longtime in Europe beginning back in 2006, when we launched and finding our way and finding local partners that would spoke six languages and then finding Americans to send over and kind of back and forth. And I think we settled on some of that a) had a greater understanding and relationship with the brand and guy named Matt Shearer who is running our Canadian business for us and took it from basically $0 million to over $100 million and walked into $50 million or $60 million U.S. dollar business and we crossed $100 million for the first time in 2014. So the momentum continues in Europe and we are incredibly excited about that. And it is not as much today about a distribution expansion game but it is about getting better in the places where we are doing business because when we say we were distributed in most of the stores it was a few racks at best of a couple compression T-shirts in typically men's only. And so we're looking to I think modify that conversation as well and take our positioning to be first of all a full resource brand meaning men's, women's, and kids. To show up and where we show up, to show up in presence, sporting goods particularly in a place like the UK has been a pretty challenged place from a discount environment and so we are also looking to be able to offset that of may be creating a unique experience for people in wholesale distribution. And then not like you're seeing us do here in America, we want to augment that with our own full price stores. The Brand House concept is something we're incredibly proud of and is really been working for us. In entering us back to America for just a second, the 30,000 square feet we just opened up in Chicago, we could only dream about what that would do from a brand elevation standpoint in celebrating some of the stories that we have in the area, but I can tell you as a company as we look to move forward we will continue to have wholesale being incredibly important part of what we do but where we look for statement retail through our Brand House concepts whether that means 2,000 to 3,000 square feet in some of the smaller markets like we mentioned Abu Dhabi or 30,000 square feet in Chicago. I think it's important that people understand the full expression of what our brand can be and frankly it's not appropriate that it's always interpreted. So we'll continue to build on that and I think you'll see more of that coming from us particularly in a place like Europe.

And Kate, I'll just add on to that like if you look at the three spots where we had the most increase in revenues year-over-year in Europe the UK, Germany, and the Middle East were the three places that you'd see that. The UK, we talked about opening up an office in Manchester back in probably 2014, and seen some benefits getting closer to the customer and the consumer there. Germany again putting some focus in market over the course of the last 12 months to 18 months and just recently now opening up an office in Munich in Germany again getting close to the customer there. And in the Middle East, we opened up our distributor in the Middle East in Q4 of last year so seeing obviously some benefit we're comping that in Q1.

Thank you. Our next question is from Jay Sole of Morgan Stanley. You may begin.

Kevin, can you talk about Connected Fitness strategy for a moment? Just from the big picture perspective how will you define success in Connected Fitness?

Yes, we spent a lot of time thinking about that and looking at what we bought and what it means in the positioning. So a couple of things, just some updates, since we've been to -- we left in New York and gave you a last real deep dive on what's happening with Connected Fitness. So first of all it's still very, it's very new. The MyFitnessPal deal just closed on March 17. So we are less than 30 days roughly into our partnership in getting to know one another. As we said, the first year was all going to be about integration and the integration begins with culture, culture of four different companies really coming together and we've been doing that with MapMyFitness from Austin, couple -- five to six weeks ago we just opened our new 35,000 square feet office in Austin which is -- it's an incredibly hot tech market and the Under Armour Connected Fitness office there anchored with Robin and his team is no exception to it. So I think that we're beginning sort of putting a flag in the ground of what that Under Armour attitude looks like. And it's evolving with taking the best things I believe of the culture that were like MapMyFitness and evolving that together to really help shape Under Armour. And it's no different with Endomando and MyFitnessPal and the way that we are going to approach that. The first thing we realized in the integration effort though is that this need for alignment from a systems perspective. So now between our own e-commerce, the number of people we have 40 somewhat odd close to 50 million people walking into our retail stores in North America this year, the 130 million unique users that we have on the platform.…

Well, that's sounds great. I mean, I can follow-up with one on that. Can you talk about the number of users in which the growth has been tremendous? Are there other metrics that you're using to measure progress? Is it sales? Is it on your engagement? I'm a user on the website? Any other detail you can share with us how to measure going forward, would be really helpful?

Well, I'm not really ready to give the new one, but another stat that I like a lot is the number of workouts that we log in a given month. And when we made the announcement, in the month of January alone, more than a 100 million workouts were logged in the month of January. And we're frankly, we're seeing that number increase and obviously, January is a big month where we all make big promises to ourselves that what's about to happen. It's like getting ready for the new school here. Well how we follow through with that in February and March, when it's cold and rainy and it's not quite as easy, but we'll be updating you with that in the future going forward. But I think we want to make sure we've got all the data synthesized and have it completely perfect. So we'll be updating you on the next call and again at the Investor Day.

Got it. Thanks so much.

Thank you. Our next question is from Omar Saad of Evercore ISI. You may begin.

I wanted to ask about DTC actually, it slowed a little bit. I know some of it was the -- some of the storms in the quarter. We've been hearing kind of generally outlet trends; traffic outlets have been slower in general to outlet centers. Why don't you give an update specifically on your outlet business, and then also the e-commerce side as well?

Yes, Omar, I'll take this one. On the DTC side, maybe it's kind of reconcile; some of the impact of some of these things that we talked about in my prepared remarks. Again, on the total revenue side, we talked about growing at 25%, but obviously at a constant currency we're at 27% and then we -- estimated impact of due to port delays and weather 1% to 2%. I will be honest with you I think we're being pretty conservative there. The thing that we can really measure and define accurately there is the retail piece, our own retail, and we know that our own retail was at least at one percentage point due to store closures for two different weekends during the first quarter where the storms hit on a weekend and we literally had dozens of stores closed down. It's a little more difficult to estimate exact impact of ports on our businesses both in DTC and wholesale, and a little more difficult to impact -- the weather impact on our wholesale business due to some degree. So we think that 1% to 2% is pretty conservative. So again total revenue going from 25% to 29% I get the use upper end of that at port and weather impact. On the DTC side, again I think if you look at weather and port we'd probably be more we say in the upper 20s as a percentage growth which would be similar to our growth rate in the fourth quarter for DTC. The biggest driver of DTC growth change year-over-year as we've talked about is the fact that we're opening up less factory house stores so we planned our DTC growth down year-over-year because of the slower growth in factory house for us and again that was as planned. On the e-commerce side in DTC, we've seen consistent strong growth in e-commerce. There's not really when you look at Q1's growth rate versus last year's growth rate pretty consistent growth rate overall in e-commerce. So, most of that decline in DTC growth rate was coming from the retail side, a lot of -- some of it being planned and some of it being because of the impact of weather. If we also just to take that a little bit further into the impact of North America obviously we put North America at 20% growth. Again we take into effect FX which is more on our Canadian business and again the port and weather challenges we probably are closer to probably a 24% or so growth rate in North America normalized taking into those items. So DTC going forward I think obviously what we would expect not really any impact going forward for port and weather obviously in the next few quarters. However, again just to -- again to make you aware that we have planned slower growth specifically around factory house new doors.

Thanks, Brad, and that's really helpful. And then Kevin, you talked about it upfront and you got these really hot properties right now in Stephen Curry. May be you guys can talk about some of the initiatives to keep the momentum going with these guys and how you monetize this, keep the momentum going to the summer and to the fall? I don't know if there's product and issues out there or maybe you start to tie it into the digital piece as well, I'm not sure if it's advanced enough to leverage that yet. But just thinking about these two incredibly hot properties right now, how you turn that into dollars and cents or maybe it's just brand halo, help us understand how you're thinking about it?

Let me expand to the conversation from just those two for a second. But Clayton Kershaw 2014 national MVP and Cy Young Award Winner; Tom Brady 2014 Super Bowl MVP, third time being named the MVP; Memphis Depay, the 20-year-old footballer that we've just signed and somebody that we have great expectation I think what he is going to be as we move into the beautiful game in a bigger way. Jordon obviously Andy Murray the number three ranked tennis player in the world; Misty Copeland, one of the top -- one of the most influential people by Time magazine, Lindsey Vonn, I think another maven just on the women's side and defining what a beautiful athlete is. And then Steph Curry, so without question, Jordon and Steph are two that incredibly relevant right now and make a lot of sense. With Jordon, I think we're letting it come to us. I mean incredibly proud I think of the styling and the way that we dress Jordon. It was incredibly athletic, it was incredibly Under Armour, it was incredibly bold, and it was incredibly American, and we that story is something that's going to translate as Under Armour continues to move itself from just being a product that seen and perceived about being on court, on field, on pitch, on the course whatever that may be as we continue to move to other places. Now this doesn't mean that we begin to compromise who we are the fact that ever Under Armour product does something for you but I just think that people are finding and seeing more ways that they can utilize and interact with our brand. And so having someone like Jordon will be able to showcase those look for us over the next decade and frankly throughout…

Thank you. Our next question is from Dave Weiner of Deutsche Bank. You may begin.

Great. Good morning. So I had two questions, Brad, first on your gross margin guidance. I think you said the 2Q and 3Q gross margin would be down in part because of West Coast airfreight and then FX. Is the expectation then in 4Qs those impacts or at least the first one regarding airfreight will fade and you'll get better -- you get a better expectation in 4Q. And then regarding China, Kevin, I think you said that by 2017 China, could be the second largest market behind North America, if you could just kind of confirm that and may be talk a little bit about what you're seeing there? Thanks.

Hi, Dave, I'll take the first gross margin question first and yes, if you just look at the nuances here, I think that the big stories are the foreign currency impact and airfreight. And if you look at just how the timing of those works out, the biggest pressure for airfreight which again is mostly run mitigating the West Coast port delays is going to be in the front half of the year, we talked about it in Q1. We will also have some of it, some residual going into Q2 also. And then when you look at FX, your biggest impact, we're going to have impacts every quarter for FX but your biggest impacts are going to be Q2 and Q3 kind of right in the middle of the year. When you kind of allowing those two things up together, your second quarter probably is your biggest challenge because you have both FX and airfreight. In Q3, you end up just with kind of more of an FX impact. And as you get to Q4, the FX impact is still there in Q4, just a little bit lesser because as you recall the strengthening of dollar started to happen in Q4 last year. So your comp gets a little bit easier but you still do have some challenging FX in Q4 also.

Okay. Thanks.

And Dave, as far as we think about China yes, I made that statement. So I want to be clear that our Japanese business continues to be our largest business outside the United States and closing around $300 million business for us. But that shows up as a licensing partnership that we have there. But without question, I think even considering Europe and the great growth that we're seeing there in the 30% and 40% type of growth range that we're experiencing there, China is one of those, it seems like an abundantly limitless place. And so we're just experiencing feeling a bit of that. We finished 2014 with 50 -- roughly 57 stores by the end of the year. We made mention that we're going to be opening a 100 stores outside of North America today. The majority of those are actually going to be in China. So probably come close to doubling the number of stores we have in China and these are partner stores that we show up and lot of it going to be a learning process. I mentioned Eric Haskell will begin with us April 1. He was previously the CFO and COO of Adidas, China, and he was before we brought him on is the MD of Adidas India. So he is somebody that we look at and say that somebody who has sort of been there and done it, they've seen the movie and really while it's not as easy to find him a place our brand as incredibly unique and different. The partnerships and relationships that are there is something that we really just need to tap into. We feel like we've established, I think, done a lot of the hard work in China as we have been there now. Really we opened our first store there in 2010. So we've done a lot of slugging to put the hard work in. And frankly with some of these relevant global assets we have and whether that is Stephen Curry that we're working on a tour of China with Stephen at some point later this year, or whether that is the relevance of a Jordon showing up, or the EPL, whether it's Tottenham Hotspur, we're now having Memphis Depay showing up as well. So we think that we're doing things to interact and be relevant in that market and China is almost its own world. And so we believe that when we focused and we now we have the foundations in place that we're really going to be able to number one, bring something to China and give something to China and in turn we think that's going to have a -- reap a great award for Under Armour and ultimately shareholders too.

Operator, we have time for one more question.

Our next question is from Lindsay Drucker Mann of Goldman Sachs. You may begin.

I wanted to follow up, Brad, at the Connected Fitness day you talked about disclosing core operating income, core operating margin going forward just because of some of the noise related to your acquisitions. I was hoping you could talk a little bit about your outlook for the full year, whether your view on core had changed, given some of the differences in amortization expense that you're expecting. And then, may be it sounds as if maybe there's opportunity to talk about some more specific cost savings. And, Kevin, you talked about perhaps being a little bit fat getting to where you are in terms of inventory purchases and how we should think about some of the opportunity for more belt-tightening, more efficiencies going forward? Thanks.

Sure Lindsay. And I think as you talked about yes, there are some changes here in some of the impacts. So obviously with FX working against that's a little bit more from our last time we spoke and airfreight also, we do see some offset to those impact. One, in the Connected Fitness space, the acquisitions themselves back in February, we talked about a 90 basis point impact to 2015 just from the acquisitions. We see that probably being closer to about 70 basis points or so. The biggest change being the amount of amortization that we were anticipating back in February and the intangibles and the acquisition came in a little bit different as far as value and the useful life's that are a little bit longer. So we had a little bit of benefit in amortization there for Connected Fitness offsetting some of those headwinds we had in FX and airfreight. In addition, in our core business, we do see some other opportunities again for some additional savings to help offset some of the other headwinds we talked about earlier. So overall, Connected Fitness acquisition with probably 90 basis point impact for the year is looking more like about 70 basis points now.

All right. Thanks, everyone for joining us on the call today. We look forward to reporting you our second quarter 2015 results which tentatively have been scheduled Thursday, July 23, at 8:30 a.m. Easter Time. Thanks again and goodbye.

Thanks everyone.