Under Armour said in a previous outlook that it expects 200 million in connected fitness revenue by 2019 Photo by Under Armour

Under Armour said in a previous outlook that it expects $200 million in connected fitness revenue by 2019. (Photo by Under Armour.)

Under Armour's Connected Fitness Segment Grows Registered Users, Revenue in Q2 2016

Net revenues for the Under Armour's connected fitness segment increased to $23.5 million in second quarter 2016.

Under Armour's connected fitness platform grew to 175 million total registered users in the second quarter and continues to add 100,000 new users daily, CEO Kevin Plank told investors during a conference call Tuesday.

Under Armour, Baltimore, Maryland, reported $1 billion in net revenue across all of its categories for the second quarter ending June 30. Net revenues for the company's connected fitness segment increased 73.3 percent to $23.5 million in second quarter 2016 compared to $13.6 million in second quarter 2015. Connected fitness net revenues for the six months ended June 30 was $42 million, marking a 91 percent increase from the $22 million reported during the same period in 2015.

Under Armour's connected fitness segment added 15 million registered users compared to previous reports. The company reported 160 million unique registered users in both January's fourth quarter 2015 disclosure and in April's first quarter 2016 disclosure.

"We are learning more about our consumer every single day," Plank told investors Tuesday, citing MyFitnessPal founder Mike Lee's strategic leadership in Under Armour's connected fitness business. "With areas like sales, merchandising and product innovation now utilizing a single view of the consumer, we are just getting started at implementing these powerful insights to drive every aspect of our business."

Plank then described "small but important wins" for the company. He noted Under Armour's ability to quickly tailor its communications and content to the consumer based on the consumer's activities, which allows the company to tweak product mix for more precision at Under Armour stores. Plank also noted the use of consumer data to create a heat map of run activities around the consumer's location, which he said is "just a drop of what is to come in terms of personalization."

Under Armour's second quarter operating loss in the connected fitness segment declined from $16.1 million in 2015 to $7.5 million in 2016. The operating loss for the six months ended June 30 declined from $31.1 million in 2015 to $24 million in 2016. The company reported a $61.3 million operating loss in the connected fitness segment in 2015.

Under Armour said in a previous outlook that it expects $200 million in connected fitness revenue by 2019. The connected fitness platform consists of the HealthBox as well as the UA Record, MapMyFitness, Endomondo and MyFitnessPal mobile apps. Under Armour acquired Endomondo for $85 million and MyFitnessPal for $474 million in 2015. MapMyFitness was purchased for $150 million in 2013.

Under Armour (NYSE:UA) traded down 3.2 percent in mid-day trading at $42.22 per share.

Disclosure: Eric Stromgren owns shares of Under Armour stock and Under Armour Class C stock. 

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