Piper Jaffray Recognizes Biggest Problem for Under Armour is Intense Competition

According to a research report published by Piper Jaffray, Under Armour UA has experienced not only unfavorable weather for its merchandise, but is currently facing intense price and inventory competition. Piper Jaffray notes in the report, “Inventory levels at Under Armour have tracked ahead of future sales expectations for four consecutive quarters with inventory growth 24% ahead of next quarter's top line numbers. Given the unseasonably cool temperatures and slower than anticipated sales with its top customer, Dick's Sporting Goods, we believe in season business may have been below expectations leading to a potential acceleration in year-over-year growth of inventory levels. We believe this has the potential to impact gross margins in FQ1.” Piper Jaffray maintains its Neutral rating and $74.00 PT on Under Armour, which closed yesterday at $75.77.