Good day ladies and gentlemen and welcome to the Under Armour, Inc. Fourth Quarter Earnings Webcast and Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded. I’d like to introduce your host for today’s conference Mr. Tom Shaw, Director of Investor Relations. Sir, you may begin.

Thanks. Good afternoon to everyone joining us today's fourth 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. Joining us on today's call will be Kevin Plank, Chairman and CEO, who will provide an overview of our business including today’s acquisitions of Endomondo and MyFitnessPal, followed by Brad Dickerson, our Chief Financial Officer, who will discuss the company's financial performance for the fourth quarter and full year 2014, followed by an update to our 2015 outlook. After the prepared remarks, Kevin and Brad will be available for a Q&A session. Finally, a replay of this teleconference will be available at our website at approximately 8:00 p.m. Eastern Time today. And with that I’ll turn it over to Kevin Plank.

Thanks, Tom and good afternoon everyone. Today, we reported outstanding financial results for 2014. It was a record year in almost every aspect of our business, enabling us to continue our streak and out 19 consecutive quarters of revenue growth over 20% and five consecutive quarters of 30 plus percent growth. Heading into 2015, the confidence we have in our apparel and footwear business has never been higher. Our execution never better, and our ambition never stronger. We also announced the formation of the world’s largest Digital Health and Fitness Community with the acquisitions of Endomando and MyFitnessPal, to supplement our existing MapMyFitness and Under Armour record platforms to create Under Armour Connected Fitness. We believe this positioned Under Armour to meaningfully benefit as the world of technology and health and fitness intersect, creating new ways of connecting with athletes, building equity for our brand and additional levels of trust with our consumers. So first, I want to spend a few moments, covering how our performance this past year will inform how we will grow our business in 2015 and beyond. And then spend some time on the future state of Under Armour, and how the acquisitions we announced earlier this afternoon will help ensure two things. That we reach our consumer in a manner they expect now and in the future and that we continue to grow our business in the manner our shareholders expect as well. Crossing the $3 billion revenue mark in 2014 was an important milestone for our brand, and we did so with the most balanced growth in our history. And while a lot of today’s conversation will be about new growth drivers. We had a tremendous year in our core apparel business, growing total apparel revenues by more than half a billion dollars. The…

Thanks, Kevin. I’ll now spend sometime discussing our fourth quarter and full year 2014 financial results, followed by updated outlook for 2015. Our net revenues for the fourth quarter of 2014 increased 31% to $895 million. For the full year net revenues increased 32% to $3.08 billion, which compared to our most recent full year guidance of $3.03 billion. As Kevin outlined, this $3 billion milestone was comprised of strong results across all of our growth drivers with Apparel up 30%, Direct-to-Consumer up 32%, Footwear up 44%, and International up 96%. Focusing on the fourth quarter, we grew Apparel category 30% to $708 million compared to $546 million in the prior year’s quarter. Similar to the third quarter, our platform innovations of Storm, ColdGear Infrared and Charged Cotton were key volume drivers across the category, while new innovation like this year’s MagZip showcased our ongoing ability to bring value to the consumer. Areas of particular strength in Apparel include training, golf, outdoor, and studio. Fourth quarter Footwear net revenues increased 55% to $86 million from $55 million the prior year, representing approximately 10% of net revenues for the period. We continue to see success in running footwear across a broader price spectrum, including the $100 Speedform Apollo, traveling markets share gains has been our core sporting distribution. Basketball also continued to gain momentum, most notably around the $125 ClutchFit Drive. These categories along with our ongoing strength in areas such as cleated and slide position Under Armour as the number two overall footwear brand in some of our top wholesale accounts in 2014. Our accessories net revenues during the fourth quarter increased 22% to $79 million from $65 million last year. Growth during the quarter was primarily driven by headwear offerings, and gloves. Our global Direct-to-Consumer net revenues increased 27%…

Thank you. [Operator Instruction] Our first question comes from Omar Saad with Evercore ISI. Your line is open.

Omar?

Thanks guys, sorry about that. Nice quarter, congratulations on the bigger acquisitions. I wanted to ask about pricing. If you think about currency and some of the other things affecting your business, Kevin you mentioned premium pricing. Are you guys seeing that or thinking about using that more as a tool or mixing up to the higher price point products, the tool to drive the business and offset some of these currency and other issues...

Well, I think you heard some of the energy that we talked around footwear with the new Stephen Curry 1 at $120, SpeedForm Gemini at $130. [Indiscernible] a few years ago was what can we do to sell more products over a $100 and that’s not as easy as it’s said. And so we’ve had to learn that in the hard way, but I think what you’ve seen and now we’re in our tenth year making shoes, our eight year selling shoes that we’ve actually gotten pretty good at it. And we can drive premium pricing, something what’s been familiar to us in apparel for a very long time. So I think that we’re thoughtful and there is lot of factors of play with oil and a few other things they’re still working their way through the system, but we’re not seeing number one a great squeeze on the manufacturing prices that we’re not enjoying any advantages just yet and we are feeling some of these currency benches, but I think everybody is trying to figure out which way is up with that. At the end of the day, I am not sure it’s going to be any global or international market that will be dictating what price the Under Armour is assuming the relationship that we have with the consumer. And I think that we’ll continue to drive that and echo that and everything we do from our branding, our marketing and frankly highlighted today with the two acquisitions that we announced about a deep and better understanding of that consumer.

And Omar, a couple of other things on that too on pricing and also costing I guess I’d add into that next to. On the pricing side obviously with the strength in U.S. dollar, we’ll look at the ability to increase prices potentially on the international businesses, but obviously, that’s probably more of a 2016 conversation at this point and the teams are working through the impact of the strengthening dollar and how that will have on pricing on the international front. On the costing side kind of the same timeframe for the most part is we’re about a year ahead of the selling season and locking in fabric pricing. So the locking in are our spring, summer 2015 product and obviously our fall, winter 2015 product too are really occurred a year or to eight months ago to some degree when oil prices were still elevated. So when oil price is coming down that is one of the input cost, obviously that impact our cost. We’re locking in spring, summer 2016 fabric pricing today and we’ll be locking in fall, winter 2016 over of the course of the next six months. I think we have a better opportunity in 2016 both from a pricing perspective to the consumer and also the costing perspective from the vendor.

Thanks, that’s helpful. And then if I could ask one quick question on the acquisitions announced, for those of us who aren’t familiar with those two platforms, maybe help us understand the two businesses, the revenue algorithm, it sounds like there going to be earnings drag and still on the investment phase although growing quickly. Just kind of some of the basic fundamentals around those businesses from a financial or even just help us understand what the [indiscernible]? Thanks.

Let me take a minute Saad, because I think it’s worth just letting me explaining and go a little bit deeper. So bear with me here, but let me just start with first of all why we thought that we could do this. The basic reason is because frankly our business and our brand have never been stronger, 19 consecutive quarters 20 plus percent top line growth including last five of which we delivered over 30%. The year that we had in 2014 we saw strength across the business from, again core apparel business that grew by $0.5 billion, our footwear business that grew 44%, our international business grew 96% just to name a few of them. And frankly at the end of the day as we said and you’ve heard me say, in my white board there you see lots of slogans, things would say like over promise and delivering, dictate the tempo, and walk with a purpose. And one note that’s written in red very simply says don’t forget to sell shirts and shoes, the reason that we did what we did today was because we believe ultimately this will help us sell more shirts and shoes and reach more athletes to make them better. So what we really did? This exercise began for us a little more than a year ago in December 13, we announced the acquisition of MapMyFitness and we paid a $150 million to them. It really helps us established a beachhead in digital and as I said I think in my script, here I’d be talking about how we didn’t really have a presence, I mean combined between our internal Connected Fitness team and our e-commerce team we had less than 50 people in that group. And today we have roughly 400 people…

Thank you.

Thanks very much gentlemen.

Your next question comes from Camilo Lyon of Canaccord Genuity. Your line is open.

Thanks. Good afternoon, guys. Nice job in the quarter.

Thanks Camilo.

Shifting gears a little bit, Kevin it looks like you are making a bigger push into the outdoor category, if you could just talk about the opportunity that you see and how you think you will differentiate from some of the well-established brands in that category and what you’re doing to go after that consumer in a much bigger way.

Thanks, Camilo. So I think it’s a massive opportunity for us. And frankly, it’s one of those silent businesses that we don’t get a lot of credit for, but that we are one of the pure player leaders in this space. Walk into any Cabela's Bass Pro shop and the Under Armour presence is overwhelming. And first of all, as I dive into the question on outdoor, I think just given a nod, I think, to the brand that’s been established with the elasticity that would demonstrate with the same company that can come out with probably one of the most talked about commercials of 2014 featuring Misty Copeland and Gisele in our women’s business, I WILL WHAT I WANT campaign. It’s frankly the same company that has a relationship Willie from Duck Dynasty. And when you walk in, you see what we have in the outdoor, in the fishing, in the mountain business, there is a need for a brand like Under Armour, and I think we’re continuing to innovate, refresh off the outdoor retailer show out in Salt Lake. And amongst other things, we won Best Product, most innovative product for new shoe that we have coming out called the Fat Tire shoe, it’s a partnership that we did with Michelin and it puts us against currently with a shoe that’s fashioned to be seen those big oversized bikes that ride on snow or can ride on sand. And I think it’s just another approach that we’re taking from a very consumer centric approach that demonstrates we know what we’re doing. From a ability to win there, you’re going to start see our outerwear which we’ve been making frankly for the last seven and eight years. And among that time we’ve of course built a better relationship with…

Great and then Brad just another question for you on the 2015 revenue outlook, so the fourth quarter had pretty impressive growth, on top of was a very strong growing quarter last year. So you see basically prove that you can comb on the comps. You’re looking that 22% growth for 2015, may be you can just help us understand why that momentum that you’re seeing in the business shouldn’t sustain at some elevated level above that?

Sure. So if you kind of walk from our 2014 a 32% top line growth to our 22% guidance for 2015, I think, the first place you have to look is our international business, which grew 96% in 2014 and that really included a lot of new launches into new markets like Brazil, Chile, South East Asia and the Middle East. Most of those launches happening more from the middle of the back half of the year. So although we still anticipate very, very strong growth in our international businesses we will be comping those market entries, year-over-year. In addition, on the international side the foreign currency, the strengthening off the U.S. dollar, I mentioned in my prepared remarks the 1% decline in revenue just from the last 90 days activity in foreign currency for the full year is a two percentage point growth head with the strengthening dollar, full year year-over-year for us. So if you take both of those factors, the international business comping those market launches and the impact of the strengthening dollar, we probably have more than half of the walk down from 32% to 22%. On the North America side, obviously, we have this planned deceleration of our factory house growth, we’ve planning for over the course of the last few years. We talk about adding less new doors and focus more on square footage growth. So although we are focusing on square footage growth that that square footage growth year-over-year, as you saw in Q4, also it declined in 2014 from 2013. It will be declining throughout 2015 compared to 2014 also. So that’s another factor that’s really kind of driving us down. And on the wholesale side, I have always been pretty clear and I am going to take a look at the information I have today, when we give our guidance and forecast going forward. And obviously, we have our Q4 results in, but the data point that I don’t have today for the back half of 2015 is all of our bookings and orders on the wholesale side, specifically again in our largest business, which is North America wholesale don’t have those booking in for a good part of the back half of the year, especially the fourth quarter. So obviously, taking a cautious approach to our forecast and from that aspect based on the sector we don’t have that data in place right now.

Perfect. Just quickly a follow up on that is - there was a question and I think that Laurent asked about pricing. It sounds like with new technologies, new innovations, new product introductions that there is a positive-ish fee contribution that we just expect to see at least in the back half, introducing GORE-TEX into some of the outerwear, got new innovations on the [indiscernible] side. Is that a fair way to think about it? And if so, maybe help understand - talk about the magnitude of the ASP increase?

Yes, I mean, we - it’s little hard to forecast an ASP increase. There’s a lot goes into that relative to mix and the expectation of mix. But that’s - obviously, it’s an important part of our story from an innovation perspective. And obviously as we innovate, those are mostly coming in at premium price point when we innovate. So it will definitely have a positive impact on our ASPs as it get to the back half of the year, continue to innovate. But obviously our price point increase over the course of the last few seasons has been kind of in the low to mid single-digit range. So our story is growth, its unit growth, it’s less about ASP growth. That ASP growth is important from an innovation perspective for us, but our brands is all about unit growth.

Yes, look, Under Armour is a front porch brand. So what you will continue to see us do is take a Class A partner that we can bring in that have incredible technology like the Gores and like the Michelins and companies like the HTCs that we can use that to leverage our existing platform of story telling and we can take it in a meaningful way to our consumers that helps improve them and make an athlete better. So we will continue to stay with that. We will continue to find the right partnerships. And when you make great product that actually works, it’s not - price is not your issue or your problem. So I think going back to the first question that Omar asked as well as that we’ve got a lot of room for our consumer that trust us. And what we do and we focused on every single day here is making sure we never violate that trust and keeping levering best-in-class products.

Perfect, thanks guys.

Thanks very much.

Thank you, and our next question comes from Jim Duffy of Stifel, your line is open.

Thanks good afternoon everyone. So I look forward to watch in the connected health and fitness evolves that’s quite a portfolio you’ve built. Kevin, with that mind, you speak to opportunity to leverage Endomondo European user base to help accelerate development of the shirts and shoes business in Europe?

Of course, so I think first of all, we’re doing on a global basis right now, is pretty extraordinary. We’re up a 123% in the quarter, 96% for the full year and it’s a first year where we saw Europe to pass a $100 million and really hats off tour team and particularly, Matt Shearer, who is there before, who we pulled our Canadian business and sent over there to really get the shift right which was a place that we took a lot of hits in Europe for a long time before we figured out how to make things happen. And we really took one of our own who built an amazing $100 plus million business in Canada and asked him to do the same thing in Europe. And then handed him the reins in the last eight months or so to an industry professional guide and Chris Bate has been, we’ve got the leadership established and in place. But there’s a lot of things that apply there, so of course first and foremost his leadership. But I really like the assets that we’ve been signing and thank to the global perspective that we’ve taken. Things like Tottenham Hotspur and being in the EPL has been really important for us and continued to double down with athletes and with assets on the outside being relevant to that consumer but like anything, Europe is not happen over night and it takes a little bit longer. And so as we sit here in our, I guess ninth year doing business over there it’s been a long run. What we’re seeing there was the partnerships that we have on the wholesale side, a lot of really good things that have been going on. Some of the milestones, again we said to surpassed…

Great. And then state on the international topic, which are the regions are you most optimistic about growth for 2015. Is it Europe or some of the other regions, which maybe you didn’t mentioned over delivering?

So let me layout. So Latin America was really - it began as Charlie’s wheelhouse for us, but we’re looking at these markets and things that we thought would be nice countries to do business in. We’re not looking at and saying what’s our roadmap to $100 million, places like Mexico, Brazil, Chile, where it begins as always with great, great leadership. But Brazil right now, we’ve got over 100 branded spaces that we opened in 2014 while more than 250 spaces in 2015. Obviously the energy and excitement with the Olympics coming there next year is going to be a big deal. Mexico continues to move for us. We’ve got a new master franchise agreement that’s going to magnify our distribution approach that we have there, big assets like Toluca and Cruz Azul and the Mexican Football League there and then in Chile where we announced probably would felt like a bit pre-mature, but Colo-Colo which is one of the top football clubs in Chile. We opened our first brand house in the fourth quarter and its doing incredibly bigger than we thought it would do. China is when we talk about store growth opening over a 100 stores, the majority of those stores - come out of China and finding and many of them partner run and but it’s not like its make the difference as we expand from just two cities to more than 10 cities across China. We want to get into the routes of the country and we want to make sure that they understand our authenticity and our commitment to China. But again China from where it was and we launched in 2008-2009, China again is going to be another international breakeven story for us. So the line of sight that we have towards…

Great. Thanks for the regional profitability perspective.

You bet, thanks. One at a time, Jim, one at a time.

Thank you. Our next question comes from Michael Binetti of UBS. Your line is open.

Hey, guys, good evening, great quarter.

Thanks, Michael.

Just on the guidance, Brad, maybe just a good one for you. If I strip out what you are telling us the guidance was like for the acquisitions and maybe FX, it looks like a pretty meaningful increase to the EBIT dollars here. And you said, you pointed quickly to supply chain efficiencies and those kind of things. Just the number looks a little bit [indiscernible] so maybe we can just get a little bit more color on that please?

Yes, you are talking about the offset basically to what I talked about in my prepared remarks.

Yes, it seems like some pretty good efficiency rolling through there.

Yes, I think part of it was looking at some opportunities that were really driven by the impact of the strengthening dollar to some degree. So a lot of our initiatives are focused on things in the supply chain for the fact that the dollar strengthened pretty significantly here in the last 60 days really. I think it gives us some opportunities potentially within the supply chain to take advantage of some of that especially towards the back half of this year, obviously, the front half of this year is locked in. So part of that probably initiative there is to look at ways to get some money out of the supply chain because of the strengthening dollar. Obviously, you kind of have some offsets in SG&A with the strengthening dollar too in the international business from a cost perspective to that just going to come naturally. And if there are just things of SG&A or itself as we did the acquisitions, there are some things that made sense to scale back a little bit because we felt the investment in the acquisitions was a complimentary thing to be doing to some of the things that we’re planning on doing initially anyway, so some synergies there to some degree. So although it seems like big, big items there to offset, most of them are pretty natural because of the strengthening dollar, some synergies and the acquisitions that we’re doing compared to some other investments that we’re going to make and some things naturally true [indiscernible] make sense for us to kind of go after again just from a bottom line perspective.

Okay, thanks. That is helpful. And then if wouldn’t mind just a couple other modeling questions. It’s we obviously got like a one time step up change in the revenue growth rate for international as you rolled in some businesses this year, but I think one of the more complicated things for the modelers is to figure out what the run rate of these international businesses. Is there anyway you could give us guardrails to think about between U.S. growth versus international growth for the year within your guidance and then maybe DTC versus wholesale just we have some guardrail.

Yes, I mean, I could probably pick points more directionally and giving you actual numbers, but again like if you think about our overall growth in company in 2014 of 32% and our international growth at 96%. There is even three times number basically there international versus overall company growth. Obviously as we talk about again lasting some of those market entries last year, again the impact of foreign currencies on international revenues that that growth rate will come down much more. So instead of a three times number, it might look more like a two times number or something like that, but again I’m thinking more directionally here versus giving you number. On the DTC side, the real change here is going to be on the factory house side that real change is again planned business we’ve been talking all along in the last couple of years. The ability to really focus more on our Brand House initiatives and our e-commerce business has growth drivers and really planning on taking our especially North America Factory House growth down as we started limit our new door growth and focus on square footage growth. So again I think that’s going to be a piece that if you look at DTC growing 32% this year, you would expect with Factory House being a largest portion of that, you would expect that growth rate to come below 30% to some degree.

Thanks a lot guys.

Okay.

Operator we have time for one more question.

Thank you. Our next question comes from Eric Tracy of Janney Capital Markets. Your line is open.

Hi guys, thanks for squeezing me in, my congrats.

Thanks Eric.

Hi, Kevin, let me - up on footwear here, I don’t think we’ve really talked about that. Is this feels this was the year that you gotten permission from the consumer, clearly reflected in the pricing migrating higher, is huge brand campaign around [indiscernible]. Maybe just talk through again the selection, how we think about the innovation sort of emerging? And then maybe most importantly adding Peter here to the leadership team what we should be thinking about directionally for the overall business?

Of course, so like everything it always begins with leadership. And first of all, that starts with my regional partner Kip Fulks who has been driving footwear for last several years. And Kip is really - he is the heart and soul of this company, and I think what we’d always looking for is for that heart and soul to come out through our product. And something we are very proud of is our apparel, but something I would think that the consumers seen come out and really articulate in the voice of our footwear product too. So a lot of big stories, lot of good things to build on I mean, launching this SpeedForm platform was one of the leading launches that we had in best debut runners world and I think a lot of accolades that made us all incredibly proud of what we did last year. Likely I feel like we’re always getting caught up talking about success and cleats. But that is really a big deal from where we begin all the way back in 2006 till today. We are clearly the number two player in the market with somewhere in the mid 30s in terms of market share. And outline of side is being the number one football cleat in America. And we say that from the standpoint now if it leaves we can kill it. And what we heard was that we would never have the ability to be successful in these markets, we could never, we can never. And all we’ve done is comeback with better product every single year winning more consumers that are choosing our brand. So what you’re seeing happen in play out in our longer standing business in Apollo was this American football cleats, its happening in the same…

[Indiscernible] sneak out long was a pair of flat tires not from kind to me in and I didn’t want it.

Hey, let me just really, quickly follow with Brad, just again if we could from a modeling perspective, if we strip out currency and the supply chain efficiency sort of offset there. And I think through again just a mix shifts on the accelerating footwear and still outsized international growth. And what point are we at whether it’s, we really start to flatten it, it is at least neutral is it this year, is it next year just trying to think through to delusion accretions for these businesses?

I think one thing we should take into account is the fact that we had been investing in the Connected Fitness business over the last couple of years, even before these two acquisitions. So the reality that our operating margin has been relatively flat over the last couple of years that 11.4%, 11.5% range. Reality is the mix of that Connected Fitness obviously has been an investment and increasing investment on the last couple of years, even before these acquisitions and on top of that, obviously adding 90 basis point dilutive impact in 2015. So the reality is over the last couple of years we have been leveraging kind of our core business. Even though we are investing in places like International, and innovation and product creation and footwear, we’re still seeing some leverage across other points in our existing business. And Connected Fitness has been an investment perspective. So if you look going forward, I think, what you would expect to see is continued investment in places like I just mentioned, International although becoming profitable and although leveraging within the business and itself, is still really an overall investment point in overall company. Things like Brand House was the kind of - just kind to getting of the ground whether it be Brand House in the international front or specifically Brand House here in North America is definitely in investment mode for us. And then I think again Connected Fitness with the acquisitions on top of the existing model will be investment mode. So I think what you’re seeing here is kind of a continuation of leverage in our core business in the places you would expect us the leverage and balancing that leverage with needed investments to continue to drive long-term sustainable growth for our brand.

Perfect. Thanks, guys.

Thanks very much, Eric.

And If I could just take one moment and thank everyone for joining us today. We’re incredibly proud of our results and performance and consistency that we have demonstrated throughout 2014 as well as the defining steps taken today to drive our leadership in the Connected Fitness space. We look forward to providing further details on our Connective Fitness efforts at our presentation and webcast next Tuesday, February 10, live from New York City beginning at 10 AM and you are all invited. Thank you all very much and have a great year.