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Things You Must Note Before Under Armour's (UAA) Q4 Earnings
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Under Armour, Inc. (UAA - Free Report) is scheduled to report fourth-quarter 2019 results on Feb 11, before the opening bell. This Baltimore, MD-based company reported a positive earnings surprise of 27.8% in the preceding quarter. Investors are counting on another beat by this athletic apparel maker in the to-be-reported quarter. If all goes well, this will mark the company’s third straight quarter of an earnings beat.
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 10 cents, suggesting growth of about 11% from 9 cents earned in the year-ago quarter. We note that the Zacks Consensus Estimate has been stable over the past 30 days. The consensus estimate for quarterly revenues stands at $1,465 million, which indicates an increase of more than 5% from the year-ago quarter.
In the last earnings call, Under Armour guided an improvement in direct-to-consumer business for the fourth quarter, thanks to traffic growth, conversion and new door openings. Management also projected an improvement in licensing business on account of contractual royalty minimums and settlement with one of its North American partners. These factors are expected to show on the company’s fourth-quarter top line.
Notably, Under Armour has been progressing well with its multi-year transformation plan and is focused on strengthening brand through enhanced customer connections, effective innovation and strict go-to-market process. Additionally, the company’s digital and marketing capabilities coupled with footwear and connected fitness businesses are key strengths. The company’s international business is another growth driver.
Furthermore, a positive channel mix from lower off-price sales and supply-chain endeavors, comprising more favorable product cost and lower airfreight are likely to have contributed to gross margin expansion.
However, headwinds related to persistent traffic and conversion challenges, mainly in the company’s North American outlets, coupled with lower-than-planned excess inventory to service the off-price channel remain. Again, adverse impact of foreign currency translation cannot be ignored along with stiff competition from prominent retailers.
What the Zacks Model Unveils
Our proven model does not predict an earnings beat for Under Armour this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Although Under Armour carries a Zacks Rank #3, it has an Earnings ESP of -1.96%.
Stocks With a Favorable Combination
Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Crocs (CROX - Free Report) has an Earnings ESP of +30.00% and a Zacks Rank #3.
G-III Apparel Group (GIII - Free Report) has an Earnings ESP of +5.62% and a Zacks Rank #3.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Things You Must Note Before Under Armour's (UAA) Q4 Earnings
Under Armour, Inc. (UAA - Free Report) is scheduled to report fourth-quarter 2019 results on Feb 11, before the opening bell. This Baltimore, MD-based company reported a positive earnings surprise of 27.8% in the preceding quarter. Investors are counting on another beat by this athletic apparel maker in the to-be-reported quarter. If all goes well, this will mark the company’s third straight quarter of an earnings beat.
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 10 cents, suggesting growth of about 11% from 9 cents earned in the year-ago quarter. We note that the Zacks Consensus Estimate has been stable over the past 30 days. The consensus estimate for quarterly revenues stands at $1,465 million, which indicates an increase of more than 5% from the year-ago quarter.
Under Armour, Inc. Price and EPS Surprise
Under Armour, Inc. price-eps-surprise | Under Armour, Inc. Quote
Key Things to Note
In the last earnings call, Under Armour guided an improvement in direct-to-consumer business for the fourth quarter, thanks to traffic growth, conversion and new door openings. Management also projected an improvement in licensing business on account of contractual royalty minimums and settlement with one of its North American partners. These factors are expected to show on the company’s fourth-quarter top line.
Notably, Under Armour has been progressing well with its multi-year transformation plan and is focused on strengthening brand through enhanced customer connections, effective innovation and strict go-to-market process. Additionally, the company’s digital and marketing capabilities coupled with footwear and connected fitness businesses are key strengths. The company’s international business is another growth driver.
Furthermore, a positive channel mix from lower off-price sales and supply-chain endeavors, comprising more favorable product cost and lower airfreight are likely to have contributed to gross margin expansion.
However, headwinds related to persistent traffic and conversion challenges, mainly in the company’s North American outlets, coupled with lower-than-planned excess inventory to service the off-price channel remain. Again, adverse impact of foreign currency translation cannot be ignored along with stiff competition from prominent retailers.
What the Zacks Model Unveils
Our proven model does not predict an earnings beat for Under Armour this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Although Under Armour carries a Zacks Rank #3, it has an Earnings ESP of -1.96%.
Stocks With a Favorable Combination
Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Zumiez (ZUMZ - Free Report) has an Earnings ESP of +0.24% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Crocs (CROX - Free Report) has an Earnings ESP of +30.00% and a Zacks Rank #3.
G-III Apparel Group (GIII - Free Report) has an Earnings ESP of +5.62% and a Zacks Rank #3.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>