Canaccord: Under Armour One Of Best Growth Stories In Retail, Reiterating Buy

In a report rolled out Tuesday, Canaccord analysts Camilo Lyon and Pallav Saini reiterated a Buy rating and a $97 price target on shares of Under Armour Inc UA. However, the stock is down about 1.6 percent on Tuesday trading.

As anticipated in the title of this article, the firm views Under Armour as “one of the best growth stories in retail.” The firm is scheduled to report its first quarter financial results next Tuesday, April 21, before the bell; heading into this date, the analysts are expecting another strong quarter “that reflects the robust sales growth trajectory UA is on.”

Canaccord is modeling EPS of $0.04, below consensus of $0.05, on sales growth of 25 percent, driven by footwear, which they expect to account for 14 percent of sales, international (9 percent), and women's (30 percent).

The firm recently ran store checks and discussed the business with its retail contacts. These “have indicated strong full price selling in both footwear (basketball and running) and apparel (training and outdoor).” In fact, the note states, they believe upside to their sales estimates “could come from outsized growth in footwear as the Curry One and Speedform Gemini have been very well received by consumers.” Furthermore, the analysts expect to see “accelerating gains internationally as UA continues to drive increased brand awareness, particularly in Europe.”

Bottom line, they expect the first quarter to showcase, once again, “the momentum UA is generating across categories (footwear and apparel), channels (DTC and w/s) and regions (Europe, Latin America, and Asia).”