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Under Armour (UAA) Q3 Earnings Beat Estimates, Revenues Fall Y/Y
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Under Armour, Inc. (UAA - Free Report) came up with third-quarter fiscal 2024 results, wherein the top line missed the Zacks Consensus Estimate and dropped year over year. Conversely, the company’s bottom line exceeded the consensus estimate and showcased an increase from the year-ago period.
Revenue & Earnings Picture
The Baltimore-based company reported adjusted earnings of 19 cents a share, which beat the Zacks Consensus Estimate of 11 cents. The figure increased from the adjusted earnings of 16 cents a share reported in the year-ago period.
Meanwhile, net revenues of $1,486.1 million fell short of the Zacks Consensus Estimate of $1,507 million and decreased 6% on a year-over-year basis. The metric declined 7% on a currency-neutral basis.
Wholesale revenues declined 13% to $712 million, while direct-to-consumer revenues saw a 4% increase, reaching $741 million. This growth stemmed from a 5% rise in revenues from owned and operated stores, coupled with a 2% increase in e-commerce revenues. E-commerce revenues accounted for 45% of the total direct-to-consumer business during the quarter.
Under Armour, Inc. Price, Consensus and EPS Surprise
By product category, Apparel revenues edged down 5.5% year over year to $1,016.7 million, while Footwear revenues decreased 6.6% to $331 million. Revenues from the Accessories category fell 0.3% to $104.5 million. Meanwhile, Licensing revenues dropped 2.2% to $29.1 million.
Net revenues from North America declined 11.8% to $915.4 million. Meanwhile, revenues from the international business increased 7.4% (up 4.1% on a currency-neutral basis) to $566 million.
Within the international business, net revenues from the EMEA jumped 7.1% to $284 million. Revenues from the Asia-Pacific rose 7.1% to $212 million, while revenues from the Latin American region grew 9.4% to $69.8 million.
The company’s gross margin expanded 100 basis points to 45.2% from the prior-year period, largely propelled by supply chain efficiencies resulting in reduced freight costs. However, this gain was partly offset by strategic inventory management measures, such as higher sales to the off-price channel and increased promotional efforts within the direct-to-consumer segment.
Adjusted SG&A expenses declined 4% to $579.2 million. Adjusted operating income came in at $92 million, down from $95 million reported in the year-ago period.
Other Financial Details
Under Armour ended the quarter with cash and cash equivalents of $1,040.1 million, long-term debt (net of current maturities) of $595.1 million and total stockholders' equity of $2,173 million. For fiscal 2024, management expects capital expenditures between $210 million and $230 million.
During the quarter, the company repurchased Class C shares worth $25 million. As of Dec 31, 45.6 million shares for $500 million had been bought back, concluding the two-year program approved in February 2022.
FY24 Outlook
Under Armour now anticipates a revenue decrease of 3% to 4%. It had earlier projected a decline of 2% to 4%.
The gross margin is projected to rise 120 to 130 basis points, marking an upward revision from the previous expectation of a 100 to 125 basis point increase. Management foresees SG&A expenses to be flat to down slightly.
Operating income is projected to range between $287 million and $297 million. Excluding the impact of the company's litigation reserve, adjusted operating income is anticipated to be $310 million to $320 million.
Under Armour anticipates earnings to fall within the range of 57-59 cents per share, including a 12-cent after-tax benefit from the final earn-out related to the sale of the MyFitnessPal platform and a five-cent negative impact of the litigation reserve. Excluding these net positive impacts totaling 7 cents, the company foresees adjusted earnings between 50 and 52 cents per share.
This Zacks Rank #3 (Hold) stock has advanced 7.2% in the past three months compared with the industry’s rise of 13.3%.
Stocks to Consider
Here, we have highlighted three better-ranked stocks, namely Abercrombie & Fitch (ANF - Free Report) , American Eagle Outfitters (AEO - Free Report) and Deckers Outdoor Corporation (DECK - Free Report) .
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year revenues suggests growth of 14.9% from the year-ago reported figures. Abercrombie & Fitch has a trailing four-quarter earnings surprise of 713%, on average.
American Eagle Outfitters, a specialty retailer that provides clothing, accessories and personal care products, currently sports a Zacks Rank #1.
The Zacks Consensus Estimate for American Eagle Outfitters’ current fiscal sales and earnings calls for growth of 5% and 45.4% from the year-ago reported figure. AEO delivered a trailing four-quarter earnings surprise of 23%, on average.
Deckers, a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories, currently sports a Zacks Rank #1.
The Zacks Consensus Estimate for Deckers’ current fiscal sales and earnings suggest growth of 15.3% and 37.3% from the year-ago reported figure. DECK delivered a trailing four-quarter earnings surprise of 32.1%, on average.
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Under Armour (UAA) Q3 Earnings Beat Estimates, Revenues Fall Y/Y
Under Armour, Inc. (UAA - Free Report) came up with third-quarter fiscal 2024 results, wherein the top line missed the Zacks Consensus Estimate and dropped year over year. Conversely, the company’s bottom line exceeded the consensus estimate and showcased an increase from the year-ago period.
Revenue & Earnings Picture
The Baltimore-based company reported adjusted earnings of 19 cents a share, which beat the Zacks Consensus Estimate of 11 cents. The figure increased from the adjusted earnings of 16 cents a share reported in the year-ago period.
Meanwhile, net revenues of $1,486.1 million fell short of the Zacks Consensus Estimate of $1,507 million and decreased 6% on a year-over-year basis. The metric declined 7% on a currency-neutral basis.
Wholesale revenues declined 13% to $712 million, while direct-to-consumer revenues saw a 4% increase, reaching $741 million. This growth stemmed from a 5% rise in revenues from owned and operated stores, coupled with a 2% increase in e-commerce revenues. E-commerce revenues accounted for 45% of the total direct-to-consumer business during the quarter.
Under Armour, Inc. Price, Consensus and EPS Surprise
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Under Armour, Inc. price-consensus-eps-surprise-chart | Under Armour, Inc. Quote
Let’s Delve Deeper
By product category, Apparel revenues edged down 5.5% year over year to $1,016.7 million, while Footwear revenues decreased 6.6% to $331 million. Revenues from the Accessories category fell 0.3% to $104.5 million. Meanwhile, Licensing revenues dropped 2.2% to $29.1 million.
Net revenues from North America declined 11.8% to $915.4 million. Meanwhile, revenues from the international business increased 7.4% (up 4.1% on a currency-neutral basis) to $566 million.
Within the international business, net revenues from the EMEA jumped 7.1% to $284 million. Revenues from the Asia-Pacific rose 7.1% to $212 million, while revenues from the Latin American region grew 9.4% to $69.8 million.
The company’s gross margin expanded 100 basis points to 45.2% from the prior-year period, largely propelled by supply chain efficiencies resulting in reduced freight costs. However, this gain was partly offset by strategic inventory management measures, such as higher sales to the off-price channel and increased promotional efforts within the direct-to-consumer segment.
Adjusted SG&A expenses declined 4% to $579.2 million. Adjusted operating income came in at $92 million, down from $95 million reported in the year-ago period.
Other Financial Details
Under Armour ended the quarter with cash and cash equivalents of $1,040.1 million, long-term debt (net of current maturities) of $595.1 million and total stockholders' equity of $2,173 million. For fiscal 2024, management expects capital expenditures between $210 million and $230 million.
During the quarter, the company repurchased Class C shares worth $25 million. As of Dec 31, 45.6 million shares for $500 million had been bought back, concluding the two-year program approved in February 2022.
FY24 Outlook
Under Armour now anticipates a revenue decrease of 3% to 4%. It had earlier projected a decline of 2% to 4%.
The gross margin is projected to rise 120 to 130 basis points, marking an upward revision from the previous expectation of a 100 to 125 basis point increase. Management foresees SG&A expenses to be flat to down slightly.
Operating income is projected to range between $287 million and $297 million. Excluding the impact of the company's litigation reserve, adjusted operating income is anticipated to be $310 million to $320 million.
Under Armour anticipates earnings to fall within the range of 57-59 cents per share, including a 12-cent after-tax benefit from the final earn-out related to the sale of the MyFitnessPal platform and a five-cent negative impact of the litigation reserve. Excluding these net positive impacts totaling 7 cents, the company foresees adjusted earnings between 50 and 52 cents per share.
This Zacks Rank #3 (Hold) stock has advanced 7.2% in the past three months compared with the industry’s rise of 13.3%.
Stocks to Consider
Here, we have highlighted three better-ranked stocks, namely Abercrombie & Fitch (ANF - Free Report) , American Eagle Outfitters (AEO - Free Report) and Deckers Outdoor Corporation (DECK - Free Report) .
Abercrombie & Fitch, an omnichannel specialty retailer of apparel and accessories for men, women and kids, sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year revenues suggests growth of 14.9% from the year-ago reported figures. Abercrombie & Fitch has a trailing four-quarter earnings surprise of 713%, on average.
American Eagle Outfitters, a specialty retailer that provides clothing, accessories and personal care products, currently sports a Zacks Rank #1.
The Zacks Consensus Estimate for American Eagle Outfitters’ current fiscal sales and earnings calls for growth of 5% and 45.4% from the year-ago reported figure. AEO delivered a trailing four-quarter earnings surprise of 23%, on average.
Deckers, a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories, currently sports a Zacks Rank #1.
The Zacks Consensus Estimate for Deckers’ current fiscal sales and earnings suggest growth of 15.3% and 37.3% from the year-ago reported figure. DECK delivered a trailing four-quarter earnings surprise of 32.1%, on average.