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Under Armour (UAA) is Marching Ahead of Industry: Here's Why
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Under Armour, Inc. (UAA - Free Report) , a widely recognized name in the athletic apparel and footwear industry, has exhibited an outstanding run on the bourses in the past three months. Thanks to its operational initiatives — focus on brand strengthening, enhanced customer connections and strict go-to-market process — the stock has outpaced the Zacks Textile - Apparel industry. In the said period, shares of this Baltimore-based company have soared about 37.7% compared with the industry’s rise of 10.6%.
Additionally, an uptrend in the Zacks Consensus Estimate echoes the same sentiment. The consensus estimates for the current and next financial year have moved up about 21.4% and 19.4% to 17 cents and 37 cents, respectively, over the past seven days. Notably, this Zacks Rank #3 (Hold) stock’s long-term earnings growth rate of 25% reflects its inherent strength.
Let’s Introspect
Under Armour is progressing well with its multi-year transformation plan. The company’s long-term growth strategy is focused on improving sales through product innovation, investments in own stores and digitization to directly reach customers, and selling more inventory at full price. Management believes that aforementioned initiatives along with cost-containment efforts should help the company return to double-digit operating margin over the time.
This developer, marketer and distributor of apparel, footwear, and accessories is striving to augment direct-to-consumer (DTC) and digital business channels. In its DTC business, the company is on track with efforts like store expansion initiatives and enhancement of its e-commerce platform. During the fourth quarter of 2020, direct-to-consumer revenues rose 11% to $655 million buoyed by a 25% jump in e-commerce sales.
Under Armour also continues to seek opportunities for expanding its global footprint. Notably, revenues from international business increased 7% (or up 4.1% on a currency neutral basis) to $448 million during the final quarter of 2020. Within international business, net revenues from Asia-Pacific and Latin America rose 26.1% and 2.2% to $230.8 million and $56.3 million, respectively.
Management now anticipates 2021 revenues to increase at a high-single-digit percentage rate. This reflects a high single-digit growth rate in North America and a high-teens growth rate in international markets. For first-quarter 2021, Under Armour envisions revenue growth of approximately 20%.
We believe that brand strength, better execution and cost containment should continue to contribute to company’s performance and mitigate the coronavirus crisis.
Children's Place (PLCE - Free Report) has a long-term earnings growth rate of 8%. It presently sports a Zacks Rank #1.
Abercrombie & Fitch (ANF - Free Report) has a long-term earnings growth rate of 18%. The stock carries a Zacks Rank #1.
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Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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Under Armour (UAA) is Marching Ahead of Industry: Here's Why
Under Armour, Inc. (UAA - Free Report) , a widely recognized name in the athletic apparel and footwear industry, has exhibited an outstanding run on the bourses in the past three months. Thanks to its operational initiatives — focus on brand strengthening, enhanced customer connections and strict go-to-market process — the stock has outpaced the Zacks Textile - Apparel industry. In the said period, shares of this Baltimore-based company have soared about 37.7% compared with the industry’s rise of 10.6%.
Additionally, an uptrend in the Zacks Consensus Estimate echoes the same sentiment. The consensus estimates for the current and next financial year have moved up about 21.4% and 19.4% to 17 cents and 37 cents, respectively, over the past seven days. Notably, this Zacks Rank #3 (Hold) stock’s long-term earnings growth rate of 25% reflects its inherent strength.
Let’s Introspect
Under Armour is progressing well with its multi-year transformation plan. The company’s long-term growth strategy is focused on improving sales through product innovation, investments in own stores and digitization to directly reach customers, and selling more inventory at full price. Management believes that aforementioned initiatives along with cost-containment efforts should help the company return to double-digit operating margin over the time.
This developer, marketer and distributor of apparel, footwear, and accessories is striving to augment direct-to-consumer (DTC) and digital business channels. In its DTC business, the company is on track with efforts like store expansion initiatives and enhancement of its e-commerce platform. During the fourth quarter of 2020, direct-to-consumer revenues rose 11% to $655 million buoyed by a 25% jump in e-commerce sales.
Under Armour also continues to seek opportunities for expanding its global footprint. Notably, revenues from international business increased 7% (or up 4.1% on a currency neutral basis) to $448 million during the final quarter of 2020. Within international business, net revenues from Asia-Pacific and Latin America rose 26.1% and 2.2% to $230.8 million and $56.3 million, respectively.
Management now anticipates 2021 revenues to increase at a high-single-digit percentage rate. This reflects a high single-digit growth rate in North America and a high-teens growth rate in international markets. For first-quarter 2021, Under Armour envisions revenue growth of approximately 20%.
We believe that brand strength, better execution and cost containment should continue to contribute to company’s performance and mitigate the coronavirus crisis.
3 Stocks Looking Red Hot
Boot Barn Holdings (BOOT - Free Report) has a long-term earnings growth rate of 20%. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Children's Place (PLCE - Free Report) has a long-term earnings growth rate of 8%. It presently sports a Zacks Rank #1.
Abercrombie & Fitch (ANF - Free Report) has a long-term earnings growth rate of 18%. The stock carries a Zacks Rank #1.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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