Good day ladies and gentlemen and welcome to the Under Armour Second Quarter Earnings Webcast and Conference Call. At this time, all participants are in a listen-only mode. Later, there we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder, today's conference call is being recorded. I would now like to turn the conference over to Tom Shaw, Director of Investor Relations. Please go ahead sir.

Thanks and good morning to everyone joining us in today's second 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 Web site at www.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 second 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 AM. Finally, a replay of this teleconference will be available at our Web site at approximately 11:00 AM Eastern Time today. I'll now turn it over to Kevin Plank.

Thank you Tom and good morning to everyone. I am calling in from Munich Germany where later today we’re opening our newest international office from which we’ll serve the markets in Germany, Austria and Switzerland. This is my last stop of a weeklong trip that has taken me to multiple cities including Glasgow, Copenhagen and now Munich. As we continue to grow our global footprint these trips continue to provide deeper insight into the markets and how consumers are thinking about our brand. My visit to Copenhagen reconfirmed and enhanced excitement around our recent Endomando acquisition and a huge opportunity that connected fitness provides UA with global consumers. With today’s ribbon cutting in Munich, we will now have 17 regional offices outside the United states which are positioning the brand closer to local consumer and driving incredible execution we have seen in the past year, including 93% international net revenue growth just this past quarter. That strong growth outside the United States help drive total net revenues for the quarter up 29%, the 21st consecutive quarter of 20 plus percent net revenue growth. In addition, total apparel net revenues grew by 23%, marking the 23rd consecutive quarter of 20 plus percent net revenue growth. We have traditionally referred to this as our scoreboard but based on my visit the St. Andrews earlier this week, maybe we should refer to it as a leader board. Either way, we continue to shoot consistently great numbers. As we prepare to enter our 20th year in the business of sports, we have learned a lot of valuable lessons, some of them have been learned through business, but just as many probably, have been learned through sports. Over the past year, three Under Armour athletes have transcended their sports and become known by just their…

Thanks Kevin. I would now like spend some time discussing our second quarter results followed by our updated outlook for 2015. Our net revenues for the second quarter of 2015 increased 29% to 784 million. On a currency neutral basis, net revenues increased 31% for the period. Within our product categories we grew apparel net revenues 23% to 515 million compared to 420 million in the prior year’s quarter. Many of the same growth drivers that drove our first quarter apparel business continued during the second quarter including our new Armour Base Layer, updated training products and expanded golf and hunting lines. Second quarter footwear net revenues increased 40% to 154 million from 110 million in the prior year. We continue to gain significant traction across multiple footwear categories most notably within the larger markets of running and basketball. SpeedForm remains the key growth story for our brand where we introduced this innovation across a wider range of styles and categories this year. And as Kevin mentioned, we capitalized on the incredible success of Stephan Curry in basketball but new color wave quickly selling house during his MVP and championship run with the Warriors. Our accessories net revenues during the second quarter increased 39% to 83 million from 60 million last year, primarily driven by strong consumer demand for our line of bags. Our global direct to consumer net revenues increased 33% for the quarter, representing approximately 32% of net revenues. We continue to be encouraged with our recent brand house openings including the first full quarter of results for our Chicago and Mall of America stores as well as the new second quarter openings in Indianapolis and Orlando. From a global standpoint we ended the second quarter with 160 owned stores including the 139 factory house stores and 21…

Thank you. [Operator Instructions]. And our first question comes from Erinn Murphy of Piper Jaffray. Your line is now open.

I guess I was curious if you could talk a little bit more Kevin about the Connected Fitness fees. In the ware book space broadly just continues to expand whether it's Fitbit or whether it's Nike you guys already have the largest platform globally. And how do you think about it maintaining that leadership position, driving engagement. And then what are those key metrics that you are focused on, is it unique user, is it a log out, or logged workout just how to think about kind of how you are thinking about this bigger picture?

So, first of all we see this as a just a massive wide space and for me personally, I remember how I felt when I had this idea for a T-shirt or more importantly a piece of equipment to be worn underneath athletes uniforms or equipment, that in the past it always just been a short sleeve cotton t-shirt or long sleeve -- or a long sleeve cotton t-shirt depending on the weather. And it just felt like how come no one has done this before and for me personally is when we look at this opportunity to begin with it felt as if there's massive wide space in that no one -- no one in the world is measuring sort of an athlete's performance. And you start to see these things coming around whether its wearables and biometric measurement session we dabbled in that all the way back to 2008. But we quickly came to realize the value for us was not going to be in -- I think the equipment side of it but the value for us is going to be in the community. And we feel like we've really locked that up. The fact that consumers had no barometer for their health today is a mistake and it frankly that's where we see this massive opportunity. We feel that we're the best ones to take advantage of it, really because the acquisitions that we've made in the last two years. The sheer size and scale of the community that we've made, it marks us as the clear leader by a factor of as much as four, three or at least two times, now having more than 140 million unique registered users. As I mentioned in my script, adding more than a 100,000 users are downloading one…

And then I guess just my second question would just be, we head into the back to school season here domestically. Could you just talk about how your guys are feeling broadly about the environment and then I think last year, one of your major retailers received product later and this season so just help us think about if there's any kind of key nuances in the order pattern flow this season as we lap that?

Yes, I can take that Erinn, definitely we're focused on delivering back to school in a much better fashion, I think we're doing that in a better fashion this year, I think still not quite at the level that we'd like but definitely incrementally better than last year. So I think we should look much better on the retail floor in a more timely fashion for back to school this year. So we're looking -- we're thinking pretty well about that. As we get into back half of the year also, just to remember also in our guidance, kind of consistent with how we look at things in the past years too, especially when you look at fourth quarter in our guidance we’ve been consistent I think in the last couple of years talking about being very prudent in how we forecast the fourth quarter relative to weather and holiday and so forth and not taking things for granted there in our guidance. So, I’d say those are the two things in the back half of the year revenue guidance a better flow in back to school and also consistent of how we’re approaching the fourth quarter revenue guidance.

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

Kevin or Brad you guys talked about spending more on marketing here in the third quarter capitalizing on the success of your athletes and rightly, so. How do you guys think about balancing being in stocking these categories with the increased level of advertising? Are you planning on to begin production using more airfreights to get product to stores? How do you balance that supply demand equation?

This is really much more about beyond 2015 than it really is about the back half of 2015 from a revenue and product perspective. Taking advantage of the opportunity that’s in front of us from a brand perspective is really what we’re talking about here. So, the ability for us to invest in our stories here tell our stories take advantage of the unique environment we’re in and say that we’re going to drive much, much more top line in the back half of the year because of that I think there is no doubt that we’ll see some benefit and we expect to see some benefit and that’s kind of including our guidance. But the real story here is about beyond 2015, it’s about 2016 and beyond of what this does especially in key categories again like basketball and golf. And if you just think about basketball for a second and you take Stephan Curry and the ability for us to tell a story in a category that is influential not only in the basketball category but just the younger consumer and what that can mean for our youth business in 2016, '17 and beyond that’s what we’re really talking about here is just the longer opportunity versus the shorter term opportunity.

And then following up on that on the basketball commentary and Steph Curry’s success clearly the shoes have been a runway success selling out in pretty much every color where that you come out with. I think you have spoken in the past about wanting to get the footwear right the category right before fully expanding in the mall with the biggest basketball malls based retailer. Do you feel that you’re now at that point you can start to really get all of those doors penetrated and if you could remind us where you’re at from that penetration perspective and what the opportunity is?

Camilo let me take this an opportunity to just talk about our footwear a little bit, and without question the performance of Stephan and really breaking through I mean he’s since we signed Steph three years ago he’s always an underdog but he’s always the best everywhere he went and so getting credit for that is something we’re really proud of in doing whether it was as first of all most important thing to him was winning the championship but then the league MVP and then his acknowledgement at the ESPYs where I think among all athletes he’s broken through and that’s a really difficult thing to do particularly in the sport like basketball. And so we’re proud of what that means but it’s not a one way ticket to all the sudden you’ve arrived but there is a lot of work for us to be done and there is a lot more one thing I learned a long time ago when I mean with the first time an Under Armour logo popped up on the front cover of a US Today’s sports page and I thought I was walking the office and the place to be flooded with orders it’s just not the way it goes. And so brands are built on consistency, consistency is built in trust and trust is built in drops and is lost in buckets. And so what you see is we had a great big pouring I think of credibility in the sport of basketball and which Steph brings us on a day to day basis but that’s going to require a lot more investment and it’s going to require a long-term commitment. And so we want to let everybody know particularly our consumer but frankly our competition as well that we are moving…

Thank you. And our next question comes from Scott Krasik of Buckingham Research. Your line is now open.

Just first, can you give a rough mix of your international sales by region EMEA, Asia, South America, Brad? And then outside of partner stores what’s the strategy at this point I know opening owned retail.

Sure, on the mix of international roughly at this point in time you are going to look at EMEA being about half of the international business and then the other half broken out fairly evenly between Asia Pacific countries and Latin America for the most part.

And in owned retail?

Owned retail by region?

Yes, going forward.

I think Kevin to take this one too, but owned retail right now for us outside of North America a large majority of the owned retail for us is going to be in China and Latin America, in Europe we really don't have too much owned retail yet but we’re starting to get going in there in the next year or two, but you are looking at mainly Latin America and China with owned retail.

Let me use this opportunity to just talk to you about international for a second. Let me a take a minute to do that. Our footwear get away so somebody asked another question about that we can circle back on footwear. But international as I'm sitting here in Munich opening this new office and cutting a ribbon this afternoon first of all what Charlie has done for international business in really helping us accelerate and think about ourselves as a global brand but more importantly beginning to act like a global brand, we’re fast in the way of doing that, this will be our 17th office that we've opened up I think our fifth or sixth this year, in a way that relates to our brand incredibly authentic. And if you are here it basically it feels like Baltimore and Munich is beginning of course with setting the esthetic the way the place looks but the team, the people, the energy just incredibly, incredibly proud. And you are seeing that at retail too. We went and watched stores we saw three of the largest sport stores and retailers that are here in Germany and throughout Europe over the last couple of days and the excitement we have when we talk to these organizations and I believe that they have that Under Armour can penetrate where we’re very, very -- we’re very young and we’re just getting started here, while we've been doing business in selling stuff probably for the last eight years, or nine years or close to 10 years now we’re really beginning to do business, and I think it's reflective obviously in our revenues. I mean 93% revenue growth in the second quarter alone, 83% revenue growth internationally year-to-date, 94% growth in 2014, so that idea of coming…

Thank you. And our next question comes from Omar Saad of Evercore ISI. Your line is now open.

Two questions, first one on the sports category alignment, Kevin that you mentioned. Could you talk about the different -- the way you're going to reorganize the company's work structure, what are the different keys or categories you're going to be focused on, and is it going to be kind of soup to nuts, designer, design team for each of the sports, with P&L responsibility, managers reaching the sports category, even down the innovation levels, will that be sports specific marketing et cetera, help us understand to how that's going to channel -- the organizational structure is going to be change? And then I got one more follow-up?

Great question Omar, one we're anticipating. So we've been talking about this for years, we've tried implementing it for years and then we sort of got to this point where it's hard, it's not easy to change things as that we are -- we've not been end-use driven in the past, we're basically -- we've got an apparel team, we've a footwear team, we've an accessory team and we think that obviously has worked to getting us started but we're at the point where we're reaching the size and [thank you] to scale to be able to afford and more importantly not be able to not afford to go after really addressing category management. And the thing we use was the sport of golf which really got us excited, several years ago where we implemented this. And we identified a leader and they really took the bull by the horns and started with products in organizing everything from the way we showed up in our sporting goods and our wholesale partners, the way we showed up in the Green grass golf course and also given the same control over to how we're going to spend the marketing dollars and that means in addition the way we've showed up the things like POP and marketing all the way to the assets, that we signed. So it was a great story that led us to getting us during the speed. The thing for all of this and as we are going to think about category management it's going to come down to leadership and but what we wanted was accountability and where golf started is that -- I have never looked after a golf tournament several years ago, sitting there on Sunday and I'm watching and not feeling great about the way…

And then a quick question on the ARMOURY concept, having been doing by seeing cover pictures, is it more of a shop-and-shop or almost just like a store standalone store. Can you help us understand the dynamics there what it is and obviously there is I think 400 and plus Champs locations throughout the country. How you’re thinking about the rollout of it at least what the plans are at this point in time?

I think we’ve been highly successful in sporting goods the mall is being different I think Champs is a great -- it’s a bit of a step from sporting goods into the mall. And because they play that bit of a twin role but Champs and Foot Locker as a whole has been an amazing partner for us and something I think where we can translate our existing consumer. It helps get them to use to thinking about us in a mall environment. We still see ourselves as a holistic head to toe brand and our philosophy remains that we’re going to go where our consumers want in fact where they expect us. And so we’re looking forward is further ways where we can build relationships with our wholesale partners to elevate the product story of the best Under Armour we’re only and roughly 25% of the 3,400 global footing stores today. But obviously we’re working with their team and align with that. The ARMOURY and Champ is a great example of how we can grow our business in the relationship together. We’re testing a handful of these premium shop-and-shops over the next couple of years starting our own backyard in Maryland. And the early reads that we’ve seen in this thing the first several weeks that are very, very encouraging. The merchandizing is going to consider for the mixture of in line product the mall specific product in addition to some products not found elsewhere in the mall too. Things like that we’re putting our highlight fleets into the mall channel, into the ARMOURY and it’s giving just as a deeper breadth of sort of the Under Armour experience in a mall environment. So, I mean I think it’s exciting I encourage you to get a chance and we can put on listing in time and let you know where we got some of those, go see one for yourself as well.

Operator we have time for one more question.

Thank you. And our last question will come from Randy Konik of Jefferies. Your line is now open.

So I guess Kevin just wanted to kind of go back to international there that you're in Germany. So as you go along this journey of globalizing the business and the brand what if you kind of taken away over the last few years that's changed about I guess the perception of the brand from an international standpoint. How do you think you have to market differently or the same from the United States market or kind of just curious you talked about the brand evolution what do you think needs to kind of change there from an international standpoint?

Well, I think we’ve been doing it. It’s always like the 1998 the first time that we went outside the United States and that was in Japan the first partnership deal that I signed was with the NFL Europe League. So we’re no stranger to international business it’s becoming good at it more importantly I think in a lot of places, particularly here in Europe continuity is an incredibly important lesson and attribute of any brand consistency is very-very important doing things the same way I mean it’s a continent that’s a sign by history. And brands have sort of come in live today and are gone tomorrow I think everyone seen a lot of that. So a lot of it’s a bit of questioning the waiting you out and wondering are you going to make it, are you going to be there. And what we’ve seen is the brand it’s taken a while it doesn’t happen on the first handshake it doesn’t happen on the first introduction. And we came over to Europe for the first time back at the end of 2005 and in 2006 and it was a -- it's been slog we weren’t really understanding completely what we had going on at the same time we’re also organizing ourselves in North America. The thing we think about with Brad and my job is and our entire executive teams' job is again the timing and deciding how to deploy the resources the time people and money. And there is only so much of any one of them. And we’re torn with the fact that it’s always international such a small part of our business. And so U.S. and North America would usually dominate the amount of time we spend. So as we’ve grown you seen us going…

Can I just ask one more question then? As it relates to the Connected Fitness, in terms of the long-term vision is it something where over time you say we have these 100 plus million users and we can see that person A runs consistent at 5 in the morning to 10 miles a day and person B runs or doesn't run what have you over time you can tailor your marketing, customize marketing to these people whether it be your footwear or apparel what have you. How do you kind of think about the leveraging this data base from A from a marketing standpoint to further drive more connectedness towards the brand but also towards specific categories to help accelerate those?

When we first did the, I don't think I answered that when I did my Connected Fitness either sort of the way that we’re thinking about measurement of growth and things like that. When we made the announcement we called Digital Day few days past following our 2014 earnings call we told that there were 120 million people roughly on the platform and there was about a month or so later I was on I did talking head show and we said 130 million and now today we’re telling it's over 140 million people. We would be careful to sort of quantifying these things in terms of number of users we have. Our next job is really figuring out how to make them good quality users as well. I take 40 million hyper engaged people that really we’re getting benefiting from the brand using our apps and our ecosystem using that as a learning place that we could grow that out to a broader audience. At the same time the scale that we’re growing is nothing we want to ignore but we think the definition of success is not just the total top-line number of users, however we’re growing north of 30% and seeing that consistently happen that is going to be something as positive. But what I think you'll see from us and again we’re going to go deeper on our own Investor Day into what the story of Connected Fitness means for the Under Armour brand is that there is a high level of engagement that we’re going to be able to drive with that. And without doubt our gear tracker side alone which is something it's exclusive to the MapMyFitness platform there is more than 400,000 people that are actively tracking products and whether it's a pair…

And we have a few closing comments from Kevin.

With that, I think we've talked a lot today, I wish it could have gone a little deeper in the footwear but regardless, I think we remain very excited about the assets that we have today, the team that we've assembled and that begins of course with the internal leadership team that we have. I think the consumer base that we're growing and then of course the assets that we have at our athletes table. So, we're very proud of what Jordan what Steph, what Misty, what frankly all of our athletes have done and the best of all that we do believe they're all just getting started just as the Under Armour brand. So, with that I want to greet you all a good morning and have a wonderful day. Thank you all very much.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. And you may all disconnect. Have a great day everyone.