Market Overview

Why Under Armour Stock Is Tumbling

Share:
Why Under Armour Stock Is Tumbling

Under Armour Inc's (NYSE: UA) earnings report sent the stock tumbling more than 12 percent despite the company reporting a top-and-bottom-line beat and reaffirming its prior full year 2016 sales and operating income guidance.

Lindsay Drucker Mann of Goldman Sachs pointed out  several concerning financial metrics and trends, which prompted the heavy selling.

Related Link: Under Armour's Q3 Report Underwhelms Investors

Here are the analyst's key points:

  • A 29 percent growth in direct-to-consumer sales was consistent with last quarter's 28 percent gain, but on a modestly easier year-over-year comparison.
  • The 19 percent growth in wholesale revenue marks a material slowing from last quarter's 27 percent gain.
  • North American sales rose just 16 percent in the quarter compared to a 21.5 percent growth last quarter.
  • International sales rose 80 percent (excluding foreign exchange) and accelerated from last quarter's 72 percent growth.
  • Sales of footwear slowed to 42 percent growth from 58 percent last quarter and the analyst was "surprised" as she expecting at least a 50 percent growth.
  • Apparel sales rose 18 percent, which exceeded the analyst's 13 percent expectation.

Drucker Mann also pointed out that Under Armour's 130 basis point year-over-year decline in margins was much weaker than expected and came in 100 basis points below consensus estimates and erased $0.02 per share in the company's reported earnings.

Bottom line, the company will update investors on its long-term growth initiatives during its conference call. However, the analyst's "conversations into earnings indicated many have been looking for UA to reduce targets."

Latest Ratings for UA

DateFirmActionFromTo
Feb 2020Credit SuisseMaintainsNeutral
May 2019JP MorganUpgradesNeutralOverweight
Feb 2018JP MorganMaintainsNeutralNeutral

View More Analyst Ratings for UA
View the Latest Analyst Ratings

 

Related Articles (UA)

View Comments and Join the Discussion!

Posted-In: apparel stocks Lindsay Drucker Mann under armour Under Armour EarningsAnalyst Color Earnings News Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
CMBMJefferiesInitiates Coverage On50.0
CLBerenbergUpgrades76.0
CATMWells FargoDowngrades39.0
BZUNCICCDowngrades36.0
BBBYRaymond JamesDowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com