We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Under Armour (UAA) Down 9.5% Since Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Under Armour, Inc. (UAA - Free Report) . Shares have lost about 9.5% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is UAA due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Under Armour Q4 Earnings Miss
Under Armour reported mixed quarterly numbers in fourth-quarter 2017 wherein earnings came in below the Zacks Consensus Estimate but revenues surpassed the same. The company reported break-even adjusted earnings, missing the consensus mark of 1 cent.
Following robust demand in Europe, the Middle East and Africa (EMEA), Asia-Pacific and Latin America the company’s top line increased 4.6% to $1,365.4 million, beating the consensus estimate of $1,308 million. Currently, the company is keen on expanding footprint and enhancing brand recognition to get an edge. Further, the deal with rising athletes lends Under Armour a suitable platform to showcase its brands.
Quarterly Results in Detail
Apparel sales rose 2.5% to $951.7 million while Footwear net revenues increased 9.5% to $246.2 million in the quarter under review. Net revenues in the Accessories category were up 6.1% to $110.7 million while Licensing revenues rose 10.1% year over year to $32.9 million. Moreover, the company’s Connected Fitness segment reported year-over-year increase of 30.8% to $23.9 million.
North America net revenues dropped 4.5% to $1,024.2 million while the same from EMEA, Asia-pacific and Latin America jumped 45.5%, 55.7% and 36% to $135.3 million, $123.9 million and $58 million, respectively.
Also, gross margin contracted 140 basis points to 45% due to aggressive inventory management that overshadowed favorable channel mix.
Other Financial Details
Under Armour ended the quarter with cash and cash equivalents of $312.5 million, up 24.8% from the prior-year period. Total long-term debt was $765 million compared with $790.4 million in the prior-year period. Shareholders' equity at the end of the quarter was $2,018.6 million.
2018 Guidance
Management expects 2018 revenues to increase by low single-digit percentage rate. While revenues from North America are likely to decline by mid-single-digit, international revenues are anticipated to increase above 25%.
The company anticipates adjusted gross margin to increase by nearly of 50 basis points to 45.5%. This improvement can be attributed lower promotional activity, product costs, channel mix as well as variation in foreign currency.
Adjusted operating income is expected to be nearly $130-$160 million. The company projects interest expenses of about $45 million. Capital expenditures are anticipated to be nearly $225 million compared with $275 million in 2017.
The company, which has undertaken restructuring efforts since 2017, projects savings of at least $75 million annually in 2019 and thereafter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter compared to one lower.
Currently, UAA has a strong Growth Score of A, though it is lagging a bit on the momentum front with a B. The stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for growth investors while also being suitable for those looking for momentum and to a lesser degree value.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, UAA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Under Armour (UAA) Down 9.5% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Under Armour, Inc. (UAA - Free Report) . Shares have lost about 9.5% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is UAA due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Under Armour Q4 Earnings Miss
Under Armour reported mixed quarterly numbers in fourth-quarter 2017 wherein earnings came in below the Zacks Consensus Estimate but revenues surpassed the same. The company reported break-even adjusted earnings, missing the consensus mark of 1 cent.
Following robust demand in Europe, the Middle East and Africa (EMEA), Asia-Pacific and Latin America the company’s top line increased 4.6% to $1,365.4 million, beating the consensus estimate of $1,308 million. Currently, the company is keen on expanding footprint and enhancing brand recognition to get an edge. Further, the deal with rising athletes lends Under Armour a suitable platform to showcase its brands.
Quarterly Results in Detail
Apparel sales rose 2.5% to $951.7 million while Footwear net revenues increased 9.5% to $246.2 million in the quarter under review. Net revenues in the Accessories category were up 6.1% to $110.7 million while Licensing revenues rose 10.1% year over year to $32.9 million. Moreover, the company’s Connected Fitness segment reported year-over-year increase of 30.8% to $23.9 million.
North America net revenues dropped 4.5% to $1,024.2 million while the same from EMEA, Asia-pacific and Latin America jumped 45.5%, 55.7% and 36% to $135.3 million, $123.9 million and $58 million, respectively.
Also, gross margin contracted 140 basis points to 45% due to aggressive inventory management that overshadowed favorable channel mix.
Other Financial Details
Under Armour ended the quarter with cash and cash equivalents of $312.5 million, up 24.8% from the prior-year period. Total long-term debt was $765 million compared with $790.4 million in the prior-year period. Shareholders' equity at the end of the quarter was $2,018.6 million.
2018 Guidance
Management expects 2018 revenues to increase by low single-digit percentage rate. While revenues from North America are likely to decline by mid-single-digit, international revenues are anticipated to increase above 25%.
The company anticipates adjusted gross margin to increase by nearly of 50 basis points to 45.5%. This improvement can be attributed lower promotional activity, product costs, channel mix as well as variation in foreign currency.
Adjusted operating income is expected to be nearly $130-$160 million. The company projects interest expenses of about $45 million. Capital expenditures are anticipated to be nearly $225 million compared with $275 million in 2017.
The company, which has undertaken restructuring efforts since 2017, projects savings of at least $75 million annually in 2019 and thereafter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter compared to one lower.
Under Armour, Inc. Price and Consensus
Under Armour, Inc. Price and Consensus | Under Armour, Inc. Quote
VGM Scores
Currently, UAA has a strong Growth Score of A, though it is lagging a bit on the momentum front with a B. The stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for growth investors while also being suitable for those looking for momentum and to a lesser degree value.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, UAA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.