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D.A. Davidson Favors Under Armour, VF Corp And Columbia In Apparel/Footwear

D.A. Davidson Favors Under Armour, VF Corp And Columbia In Apparel/Footwear

Earning season is kicking into high gear, and active lifestyle footwear and apparel companies are on deck to report their quarterly results.

Andrew Burns of D.A. Davidson favors owning shares of Under Armour Inc (NYSE: UA), VF Corp (NYSE: VFC) and Columbia Sportswear Company (NASDAQ: COLM) ahead of their respective earnings reports.

Under Armour

Burns is expecting Under Armour (Buy rated, $48 price target) to earn $0.01 per share on revenue of $1.005 billion in the second quarter. The analyst is also expecting management to reiterate its recent 2016 outlook for the full year, which consists of a 24 percent year-over-year revenue growth to $4.925 billion and operating income of $440 to $445 million.

Burns also suggested that investors pay close attention to the post-earnings conference call for key topics including a progress update on clearing excess inventory and associating margin impacts for the bottom half of 2016. In addition, investors should pay attention to any commentary on ongoing trends in the footwear and international market that will impact the rest of the year's performance.

Related Link: Was Nike In On Kevin Durant's Move To The Warriors?

VF Corp

Burns is expecting VF Corp (Buy rated, $79 price target) to earn $0.34 per share on revenue of $2.516 billion in the second quarter. The analyst noted that a reiteration of the full-year guidance is "possible," but industry-wide apparel and footwear weakness could impact VF Corp's fundamentals.

Investors should be on the lookout for any commentary on business divestures during the post earnings conference call, specifically relating to its Licensed Sports Group segment.

Related Link: Competition From Under Armour And Adidas Could Continue To Weigh On Nike

Columbia Sportswear

Burns is expecting Columbia Sportswear (Buy rated, $72 price target) to lose $0.19 per share on revenue of $393.4 million in the second quarter. Similar to VF Corp, the company's management team could reiterate its full-year guidance, but it is "not immune" to the weak environment.

Burns also recommended investors should pay attention to any commentary related to The Sports Authority's store closures and the financial impact this poses to Columbia's distribution strategy for the channel.

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Latest Ratings for COLM

May 2020CitigroupMaintainsNeutral
May 2020CFRAMaintainsBuy
Apr 2020BTIGInitiates Coverage OnNeutral

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