What To Watch For In Under Armour Earnings Report

Under Armour (UAA) is scheduled to report results for its first fiscal quarter before the market open on Tuesday, May 4, with a conference call scheduled for 8:30 a.m. EDT. Here is what to keep an eye on.

Guidance

On Feb. 10, Under Armour forecast Q1 earnings per share of 3 cents and revenue up approximately 20% y/y against analysts' estimates calling for a loss of (5 cents) and $1.09 billion, respectively. Looking to fiscal 2021, Under Armour forecast adjusted EPS of 12 cents-14 cents and revenue up in the high-single digits. Analysts currently predict EPS of 20 cents on revenue of $4.93 billion.

Pivotal Research analyst Mitch Kummetz said he sees reasons why Q1 could be stronger than what Under Armour was expecting. He believes that stimulus was a catalyst not factored into guidance and notes that the company's Google Trends search volume was "healthy" for Q1.

Restructuring Update

Last year, Under Armour approved a restructuring plan to better align its financial resources to support the company's efforts as the consumer landscape shifts. As part of the plan, Under Armour is cutting about 2% of its global workforce of 15,000.

Footwear Could be an Area of Relative Strength

Jefferies analyst Randal Konik said his web analysis points to strong improvement for Under Armour average selling price data on a year-over-year basis in both the apparel and footwear categories.

He found Under Armour's footwear average selling prices increased by about 2000 basis points more than those of Nike (NKE) from January to April, which, paired with strong web traffic performance, lead him to believe that the company's footwear could be an area of strength when the company reports on May 4, Konik tells investors. He has a Buy rating and $30 price target on Under Armour shares.

Improving Outlook

Williams Trading analyst Sam Poser upgraded Under Armour to Buy from Hold with a $30 price target. A 40% reduction in the number of products offered since 2017 and re-targeting the Under Armour brand towards the "focused performer" has set up a turnaround, while a macro trend towards an active lifestyle and stimulus money should bring more people to the brand, argues Poser.

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