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Under Armour (UAA) Up 17.7% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Under Armour (UAA - Free Report) . Shares have added about 17.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Under Armour due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Under Armour’s Q2 Earnings Top, Revenues Down Y/Y
Under Armour delivered better-than-expected earnings in second-quarter fiscal 2024, wherein the metric also increased year over year. Management also revised the guidance for fiscal 2024. The company reported earnings of 24 cents a share, which beat the Zacks Consensus Estimate of earnings of 21 cents per share. The company recorded earnings of 19 cents a share in the year-ago period.
Meanwhile, net revenues of $1,566.7 million came almost in line with the consensus estimate of $1,566 million but fell 0.5% on a year-over-year basis. The metric also slipped 1% on a currency-neutral basis.
The company’s wholesale revenues dipped 1% year over year to $940 million, while direct-to-consumer (DTC) revenues inched up 3% to $596 million due to a 2% rise in e-commerce revenues, which represented 35% of the total DTC business. Growth in the e-commerce and retail channels aided the performance. The company recorded 4% growth in owned and operated store revenues.
Let’s Delve Deeper
By product category, Apparel revenues edged up 3.1% year over year to $1,070.4 million, while Footwear revenues dipped 6.6% to $351.2 million. Revenues from the Accessories category inched up 2.5% to $113.9 million. Meanwhile, Licensing revenues tumbled 13.5% to $28.6 million.
Net revenues from North America decreased 2% to $991.4 million. Meanwhile, revenues from the international business increased 5% (up 3% on a currency-neutral basis) to $573 million.
Within the international business, net revenues in EMEA jumped 9% to $287.1 million (up 4% at constant currency), 3% in Asia-Pacific to $232.1 million (up 7% at constant currency) but fell 8% in Latin America to $53.7 million (down 19% at constant currency).
The company’s gross margin expanded 260 basis points to 48% from the prior-year period owing to gains from the supply chain with respect to reduced freight expenses, partly offset by a channel mix impact associated with the normalization of off-price sales. Selling, general and administrative (SG&A) expenses rose 2% to $606 million.
The company’s operating income increased to $145.8 million from $119.4 million. The operating margin was 9.3%, up from 7.6% in the year-earlier quarter.
Other Financial Details
Under Armour ended the quarter with cash and cash equivalents of nearly $655.9 million, long-term debt (net of current maturities) of $594.7 million and total stockholders' equity of $2,089.7 million. The inventory jumped 6% to $1.1 billion.
FY24 Guidance
Management revised the view for fiscal 2024. For the current fiscal year, Under Armour expects revenues to decline 2-4% versus the earlier view of flat to slightly up. It expects the gross margin to be up 100-125 basis points from the prior year's margin of 44.9% compared with 25-75 basis points projected previously. SG&A expenses are anticipated to be flat to slightly down, versus the previous view of flat to slightly up.
UAA still envisions earnings to be in the band of 47-51 cents per share, down from 84 cents per share reported in fiscal 2023. The company reported adjusted earnings of 58 cents a share for the comparable baseline period. Capital expenditures are likely to come in the band of $230-$250 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -32.63% due to these changes.
VGM Scores
At this time, Under Armour has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Under Armour has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Under Armour is part of the Zacks Textile - Apparel industry. Over the past month, Columbia Sportswear (COLM - Free Report) , a stock from the same industry, has gained 4.2%. The company reported its results for the quarter ended September 2023 more than a month ago.
Columbia Sportswear reported revenues of $985.68 million in the last reported quarter, representing a year-over-year change of +3.2%. EPS of $1.70 for the same period compares with $1.80 a year ago.
For the current quarter, Columbia Sportswear is expected to post earnings of $2 per share, indicating a change of -18.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.8% over the last 30 days.
Columbia Sportswear has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Under Armour (UAA) Up 17.7% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Under Armour (UAA - Free Report) . Shares have added about 17.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Under Armour due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Under Armour’s Q2 Earnings Top, Revenues Down Y/Y
Under Armour delivered better-than-expected earnings in second-quarter fiscal 2024, wherein the metric also increased year over year. Management also revised the guidance for fiscal 2024. The company reported earnings of 24 cents a share, which beat the Zacks Consensus Estimate of earnings of 21 cents per share. The company recorded earnings of 19 cents a share in the year-ago period.
Meanwhile, net revenues of $1,566.7 million came almost in line with the consensus estimate of $1,566 million but fell 0.5% on a year-over-year basis. The metric also slipped 1% on a currency-neutral basis.
The company’s wholesale revenues dipped 1% year over year to $940 million, while direct-to-consumer (DTC) revenues inched up 3% to $596 million due to a 2% rise in e-commerce revenues, which represented 35% of the total DTC business. Growth in the e-commerce and retail channels aided the performance. The company recorded 4% growth in owned and operated store revenues.
Let’s Delve Deeper
By product category, Apparel revenues edged up 3.1% year over year to $1,070.4 million, while Footwear revenues dipped 6.6% to $351.2 million. Revenues from the Accessories category inched up 2.5% to $113.9 million. Meanwhile, Licensing revenues tumbled 13.5% to $28.6 million.
Net revenues from North America decreased 2% to $991.4 million. Meanwhile, revenues from the international business increased 5% (up 3% on a currency-neutral basis) to $573 million.
Within the international business, net revenues in EMEA jumped 9% to $287.1 million (up 4% at constant currency), 3% in Asia-Pacific to $232.1 million (up 7% at constant currency) but fell 8% in Latin America to $53.7 million (down 19% at constant currency).
The company’s gross margin expanded 260 basis points to 48% from the prior-year period owing to gains from the supply chain with respect to reduced freight expenses, partly offset by a channel mix impact associated with the normalization of off-price sales. Selling, general and administrative (SG&A) expenses rose 2% to $606 million.
The company’s operating income increased to $145.8 million from $119.4 million. The operating margin was 9.3%, up from 7.6% in the year-earlier quarter.
Other Financial Details
Under Armour ended the quarter with cash and cash equivalents of nearly $655.9 million, long-term debt (net of current maturities) of $594.7 million and total stockholders' equity of $2,089.7 million. The inventory jumped 6% to $1.1 billion.
FY24 Guidance
Management revised the view for fiscal 2024. For the current fiscal year, Under Armour expects revenues to decline 2-4% versus the earlier view of flat to slightly up. It expects the gross margin to be up 100-125 basis points from the prior year's margin of 44.9% compared with 25-75 basis points projected previously. SG&A expenses are anticipated to be flat to slightly down, versus the previous view of flat to slightly up.
UAA still envisions earnings to be in the band of 47-51 cents per share, down from 84 cents per share reported in fiscal 2023. The company reported adjusted earnings of 58 cents a share for the comparable baseline period. Capital expenditures are likely to come in the band of $230-$250 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -32.63% due to these changes.
VGM Scores
At this time, Under Armour has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Under Armour has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Under Armour is part of the Zacks Textile - Apparel industry. Over the past month, Columbia Sportswear (COLM - Free Report) , a stock from the same industry, has gained 4.2%. The company reported its results for the quarter ended September 2023 more than a month ago.
Columbia Sportswear reported revenues of $985.68 million in the last reported quarter, representing a year-over-year change of +3.2%. EPS of $1.70 for the same period compares with $1.80 a year ago.
For the current quarter, Columbia Sportswear is expected to post earnings of $2 per share, indicating a change of -18.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.8% over the last 30 days.
Columbia Sportswear has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.