Forward-Looking Statements

Some of the statements contained in this Form 10-Q and the documents incorporated herein by reference (if any) constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, such as statements regarding our future financial condition or results of operations, our prospects and strategies for future growth, the development and introduction of new products, and the implementation of our marketing and branding strategies. In many cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "intends," "estimates," "predicts," "potential," or the negative of these terms or other comparable terminology.

The forward-looking statements contained in this Form 10-Q and the documents incorporated herein by reference (if any) reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause events or our actual activities or results to differ significantly from those expressed in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements, including, but not limited to, those factors described in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") (our "2008 Form 10-K") or in this Form 10-Q, if included herein, under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" ("MD&A"). These factors include without limitation:

• changes in general economic or market conditions that could affect consumer spending and the financial health of our retail customers;

• our ability to forecast and manage our growth effectively;

• our ability to effectively develop and launch new and updated products;

• our ability to accurately forecast consumer demand for our products and manage our inventory in response to changing demands;

• our ability to obtain the financing required to grow our business, particularly when credit and capital markets are unstable;

• increased competition causing us to reduce the prices of our products or to increase significantly our marketing efforts in order to avoid losing market share;

• loss of key suppliers or manufacturers or failure of our suppliers or manufacturers to produce or deliver our products in a timely or cost-effective manner;

• changes in consumer preferences or the reduction in demand for performance apparel and other products;

• reduced demand for sporting goods and apparel generally;

• our ability to accurately anticipate and respond to seasonal or quarterly fluctuations in our operating results;

• our ability to effectively market and maintain a positive brand image;

• the availability, integration and effective operation of management information systems and other technology; and

• our ability to attract and retain the services of our senior management and key employees.

The forward-looking statements contained in this Form 10-Q reflect our views and assumptions only as of the date of this Form 10-Q. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

Overview

We are a leading developer, marketer and distributor of branded performance apparel, footwear and accessories. The brand's moisture-wicking synthetic fabrications are engineered in many different designs and styles for wear in nearly every

Our net revenues grew to $725.2 million in 2008 from $205.2 million in 2004. We reported net revenues of $634.2 million for the first nine months of 2009, which represented a 16.2% increase from the first nine months of 2008. We believe that our growth in net revenues has been driven by a growing interest in performance products and the strength of the Under Armour brand in the marketplace relative to our competitors, as evidenced by the increases in our sales of apparel and footwear. We plan to continue to increase our net revenues by building upon our relationships with existing customers, expanding our product offerings, offering new and innovative products, expanding our direct to consumer sales channel and other distribution and building our brand internationally. Our direct to consumer channel includes sales through our factory house outlet and specialty stores, website, and catalog. New product offerings include the introduction of performance running footwear, which we began shipping in the first quarter of 2009 and soccer cleats which had a limited introduction at soccer specialty stores in the United States and Europe during the second quarter of 2009. In addition, we have strategic agreements with third party licensees and distributors to further reinforce our brand identity and increase our net revenues.

Our products are currently offered in over 20,000 retail stores worldwide. A large majority of our products are sold in North America; however we believe that our products appeal to athletes and consumers with active lifestyles around the globe. Internationally, our products are offered primarily in the United Kingdom, France and Germany, as well as in Japan through a third-party licensee, and through distributors located in other foreign countries.

General

Net revenues comprise both net sales and license revenues. Net sales include sales of apparel, footwear and accessories. Our license revenues consist of fees paid to us by our licensees in exchange for the use of our trademarks on products such as socks, hats, bags, eyewear, mouth guards, other accessories and team uniforms, as well as the distribution of our products in Japan.

Cost of goods sold consists primarily of product costs, inbound freight and duty costs, handling costs to make products floor-ready to customer specifications, royalty payments to endorsers based on a predetermined percentage of sales of selected products and write downs for inventory obsolescence. The fabrics in our products are made of petroleum-based synthetic materials. Therefore our product costs, as well as our inbound freight costs, could be affected by long term pricing trends of oil. In general, as a percentage of net revenues, we expect cost of goods sold associated with our footwear to be higher than the cost of goods sold associated with our apparel. In addition, cost of goods sold includes overhead costs associated with our Special Make-Up Shop located at one of our distribution facilities where we manufacture a limited number of products, and costs relating to our Hong Kong, Guangzhou, China, and Jakarta, Indonesia offices which help support manufacturing, quality assurance and sourcing efforts. No cost of goods sold is associated with license revenues.

We include a majority of our outbound shipping and handling costs as a component of selling, general and administrative expenses. As a result, our gross profit may not be comparable to that of other companies that include outbound shipping and handling costs in the calculation of their cost of goods sold. Outbound shipping and handling costs include costs associated with shipping goods to customers and certain costs to operate our distribution facilities. These costs were $5.5 million and $5.0 million for the three months ended September 30, 2009 and 2008, respectively, and $15.0 million and $12.5 million for the nine months ended September 30, 2009 and 2008, respectively.

Our selling, general and administrative expenses consist of costs related to marketing, selling, product innovation and supply chain and corporate services. Our marketing costs are an important driver of our growth. For the full year 2009, we expect to invest in marketing in the range of 12% to 13% of net revenues. Marketing costs consist primarily of commercials, print ads, league, team, player and event sponsorships, amortization of footwear promotional rights, depreciation expense specific to our in-store fixture program and marketing related payroll. Selling costs consist primarily of payroll and other costs relating to sales through our wholesale sales channel and the majority of our direct to consumer sales channel costs, along with commissions paid to third parties. Product innovation and supply chain costs include our apparel and footwear product creation and development costs, distribution facility operating costs, and related payroll. Corporate services primarily consist of corporate facility operating costs, related payroll and company-wide administrative and stock-based compensation expenses.

Other income (expense), net consists of unrealized and realized gains and losses on our derivative financial instruments and unrealized and realized gains and losses on adjustments that arise from fluctuations in foreign currency exchange rates relating to transactions generated by our international subsidiaries.

Results of Operations

The following table sets forth key components of our results of operations for
the periods indicated, both in dollars and as a percentage of net revenues:



                                                   Three Months Ended               Nine Months Ended
                                                      September 30,                   September 30,
(In thousands)                                    2009            2008            2009            2008
Net revenues                                    $ 269,546       $ 231,946       $ 634,194       $ 545,965
Cost of goods sold                                135,491         113,679         335,310         281,959

Gross profit                                      134,055         118,267         298,884         264,006
Selling, general and administrative expenses       86,992          71,788         240,544         209,954

Income from operations                             47,063          46,479          58,340          54,052
Interest expense, net                                (466 )          (111 )        (1,909 )          (498 )
Other income (expense), net                            96          (1,625 )          (253 )        (1,514 )

Income before income taxes                         46,693          44,743          56,178          52,040
Provision for income taxes                         20,511          19,080          24,595          22,132

Net income                                      $  26,182       $  25,663       $  31,583       $  29,908


                                                   Three Months Ended               Nine Months Ended
                                                      September 30,                   September 30,
(As a percentage of net revenues)                 2009            2008            2009            2008
Net revenues                                        100.0 %         100.0 %         100.0 %         100.0 %
Cost of goods sold                                   50.3            49.0            52.9            51.6

Gross profit                                         49.7            51.0            47.1            48.4
Selling, general and administrative expenses         32.2            31.0            37.9            38.5

Income from operations                               17.5            20.0             9.2             9.9
Interest expense, net                                (0.2 )          (0.0 )          (0.3 )          (0.1 )
Other income (expense), net                           0.0            (0.7 )          (0.0 )          (0.3 )

Income before income taxes                           17.3            19.3             8.9             9.5
Provision for income taxes                            7.6             8.2             3.9             4.0

Net income                                            9.7 %          11.1 %           5.0 %           5.5 %

Three Months Ended September 30, 2009 Compared to Three Months Ended
September 30, 2008

Net revenues increased $37.6 million, or 16.2%, to $269.5 million for the three
months ended September 30, 2009 from $231.9 million for the same period in 2008.
This increase was primarily the result of an increase in our footwear and
apparel net sales as noted in the product category table below:



                                       Three Months Ended September 30,
            (In thousands)         2009        2008      $ Change    % Change
            Apparel              $ 215,427   $ 201,085   $  14,342       7.1  %
            Footwear                33,048      13,065      19,983      153.0
            Accessories             10,760       8,896       1,864       21.0

            Total net sales        259,235     223,046      36,189       16.2
            License revenues        10,311       8,900       1,411       15.9

Total net revenues $ 269,546 $ 231,946 $ 37,600 16.2 %

Net sales increased $36.2 million, or 16.2%, to $259.2 million for the three months ended September 30, 2009 from $223.0 million during the same period in 2008 as noted in the table above. The increase in net sales primarily reflects:

• unit growth driven by increased distribution and new offerings in multiple product categories, most significantly in our women's fitness, women's underwear and overall running categories; along with

• $20.0 million increase in footwear sales due primarily to running footwear.

Gross profit increased $15.8 million to $134.1 million for the three months ended September 30, 2009 from $118.3 million for the same period in 2008. Gross profit as a percentage of net revenues, or gross margin, decreased 130 basis points to 49.7% for the three months ended September 30, 2009 compared to 51.0% during the same period in 2008. The decrease in gross margin percentage was primarily driven by the following:

• increased footwear and apparel liquidations to third parties, accounting for an approximate 100 basis point decrease;

• increased accessory and footwear inventory reserves, accounting for an approximate 100 basis point decrease; and

• less favorable apparel product mix relative to margins, partially offset by improved apparel costing, accounting for an approximate 30 basis point decrease; partially offset by

• decreased reserves for sales allowances and certain customer incentives, partially offset by increased sales returns reserves, accounting for an approximate 60 basis point increase; and

• increased direct to consumer higher margin sales, accounting for an approximate 40 basis point increase.

Selling, general and administrative expenses increased $15.2 million to $87.0 million for the three months ended September 30, 2009 from $71.8 million for the same period in 2008. As a percentage of net revenues, selling, general and administrative expenses increased to 32.2% for the three months ended September 30, 2009 from 31.0% for the same period in 2008. These changes were primarily attributable to the following:

• Marketing costs increased $2.9 million to $27.7 million for the three months ended September 30, 2009 from $24.8 million for the same period in 2008 primarily due to higher media costs and increased sponsorships of collegiate and professional teams and new events, including the National Football League Scouting Combine. As a percentage of net revenues, marketing costs decreased to 10.3% for the three months ended September 30, 2009 from 10.7% for the same period in 2008 primarily due to a timing shift in marketing costs for specific customers, partially offset by the items noted above.

• Selling costs increased $3.9 million to $17.7 million for the three months ended September 30, 2009 from $13.8 million for the same period in 2008. This increase was primarily due to higher personnel and other costs incurred for the continued expansion of our factory house outlet stores and higher personnel costs mainly related to increased funding for our performance incentive plan as compared to the prior year period. As a percentage of net revenues, selling costs increased to 6.5% for the three months ended September 30, 2009 from 5.9% for the same period in 2008 due to the items noted above.

• Product innovation and supply chain costs increased $4.1 million to $20.2 million for the three months ended September 30, 2009 from $16.1 million for the same period in 2008 primarily due to increased personnel costs for the build out of our footwear and apparel product design and product creation teams, as well as increased funding for our performance incentive plan as compared to the prior year period. In addition this increase was related to higher distribution facilities operating costs to support our growth in net revenues. As a percentage of net revenues, product innovation and supply chain costs increased to 7.5% for the three months ended September 30, 2009 from 6.9% for the same period in 2008 due to higher personnel costs for the build out of our footwear and apparel design and product creation teams.

Income from operations increased $0.6 million, or 1.3%, to $47.1 million for the three months ended September 30, 2009 from $46.5 million for the same period in 2008. Income from operations as a percentage of net revenues decreased to 17.5% for the three months ended September 30, 2009 from 20.0% for the same period in 2008. This decrease was a result of an increase in selling, general and administrative expenses, and a decrease in gross profit as a percentage of net revenues as discussed above.

Interest expense, net increased $0.4 million to $0.5 million for the three months ended September 30, 2009 from $0.1 million for the same period in 2008. This increase was primarily due to increased fees related to our new revolving credit facility during the three months ended September 30, 2009.

Other income (expense), net increased $1.7 million to $0.1 million for the three months ended September 30, 2009 from ($1.6) million for the same period in 2008. This increase was primarily due to gains on foreign currency exchange rate changes on transactions denominated in the Euro and Canadian Dollar, largely offset by losses on our derivative financial instruments for the three months ended September 30, 2009 as compared to foreign currency exchange rate losses, partially offset by derivative financial instrument gains for the same period in 2008.

Provision for income taxes increased $1.4 million to $20.5 million during the three months ended September 30, 2009 from $19.1 million during the same period in 2008. Our effective tax rate was 43.9% for the three months ended September 30, 2009 compared to 42.6% during the same period in 2008. The effective tax rate for the three months ended September 30, 2009 was higher than the effective tax rate for the three months ended September 30, 2008 primarily due to an increase in the projected non-deductible expenses in the current year. Our annual 2009 effective rate is expected to be approximately 44.3%, which is lower than the 2008 annual effective tax rate of 45.3% due to certain sourcing and tax strategies implemented in 2009.

Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008

Net revenues increased $88.2 million, or 16.2%, to $634.2 million for the nine months ended September 30, 2009 from $546.0 million for the same period in 2008. This increase was primarily the result of an increase in our footwear and apparel net sales as noted in the product category table below:

                                       Nine Months Ended September 30,
            (In thousands)         2009        2008      $ Change    % Change
            Apparel              $ 459,706   $ 426,480   $  33,226        7.8 %
            Footwear               127,475      75,629      51,846       68.6
            Accessories             23,548      22,264       1,284        5.8

            Total net sales        610,729     524,373      86,356       16.5
            License revenues        23,465      21,592       1,873        8.7

            Total net revenues   $ 634,194   $ 545,965   $  88,229       16.2 %

Net sales increased $86.3 million, or 16.5%, to $610.7 million for the nine months ended September 30, 2009 from $524.4 million during the same period in 2008 as noted in the table above. The increase in net sales primarily reflects:

• $51.8 million increase in footwear sales driven primarily by our running footwear launch during the first quarter of 2009; and

• unit growth driven by increased distribution and new offerings in multiple product categories, most significantly in our fitness, running, training and underwear categories.

License revenues increased $1.9 million, or 8.7%, to $23.5 million for the nine months ended September 30, 2009 from $21.6 million during the same period in 2008. This increase was the result of additional sales by certain licensees due to increased distribution, new product offerings and continued unit volume growth, as well as new licensing agreements for team uniforms and custom-molded mouth guards.

• increased footwear and apparel liquidations to third parties, accounting for an approximate 60 basis point decrease;

• increased inventory reserves, accounting for an approximate 50 basis point decrease; and

• less favorable apparel product mix relative to margins, partially offset by improved apparel costing, accounting for an approximate 40 basis point decrease; partially offset by

• increased direct to consumer higher margin sales, accounting for an approximate 20 basis point increase.

Selling, general and administrative expenses increased $30.5 million to $240.5 million for the nine months ended September 30, 2009 from $210.0 million for the same period in 2008. As a percentage of net revenues, selling, general and administrative expenses decreased to 37.9% for the nine months ended September 30, 2009 from 38.5% for the same period in 2008 partially driven by the significant revenue growth from our running footwear launch. In addition, these changes were also attributable to the following:

• Marketing costs increased $6.7 million to $82.0 million for the nine months ended September 30, 2009 from $75.3 million for the same period in 2008 primarily due to increased sponsorships of collegiate and professional teams and new events, including the National Football League Scouting Combine, and increased marketing costs for specific customers, including our in-store brand campaign supporting the introduction of our performance running footwear. These increases were partially offset by lower media and print expenditures in 2009. As a percentage of net revenues, marketing costs decreased to 12.9% for the nine months ended September 30, 2009 from 13.8% for the same period in 2008 primarily due to lower media and print expenditures costs in 2009, partially offset by the other items noted above.

• Selling costs increased $8.5 million to $47.5 million for the nine months ended September 30, 2009 from $39.0 million for the same period in 2008. This increase was primarily due to costs incurred for the continued expansion of our direct to consumer channel. As a percentage of net revenues, selling costs increased to 7.5% for the nine months ended September 30, 2009 from 7.1% for the same period in 2008 primarily due to the item noted above, partially offset by decreased apparel selling personnel costs as a percentage of net revenues.

• Product innovation and supply chain costs increased $7.3 million to $53.6 million for the nine months ended September 30, 2009 from $46.3 million for the same period in 2008 primarily due to higher personnel costs for the build out of our footwear and apparel design and product creation teams and higher distribution facilities operating and personnel costs to support our growth in net revenues. As a percentage of net revenues, product innovation and supply chain costs remained unchanged at 8.5% for the nine months ended September 30, 2009 and 2008.

• Corporate services costs increased $8.0 million to $57.4 million for the nine months ended September 30, 2009 from $49.4 million for the same period in 2008 primarily due to higher personnel costs for the increased funding for our performance incentive plan as compared to the prior year period and additional corporate personnel necessary to support our growth. In addition, this increase was due to higher company-wide stock-based compensation and higher allowances for bad debts related to the current economic conditions. As a percentage of net revenues, corporate services costs remained unchanged at 9.0% for the nine months ended September 30, 2009 and 2008.

Income from operations increased $4.2 million, or 7.9%, to $58.3 million for the nine months ended September 30, 2009 from $54.1 million for the same period in 2008. Income from operations as a percentage of net revenues decreased to 9.2% for the nine months ended September 30, 2009 from 9.9% for the same period in 2008. This decrease was a result of a decrease in gross profit as a percentage of net revenues, partially offset by a decrease in selling, general and administrative expenses as a percentage of net revenues as discussed above.

Interest expense, net increased $1.4 million to $1.9 million for the nine months ended September 30, 2009 from $0.5 million for the same period in 2008. This increase was primarily due to the write off of deferred financing costs related . . .