Under Armour Reports In-Line Q1 EPS, Revenue Beats by $20M
August 4, 2022
Trending News
Under Armour ($NYSE:UAA) reported in-line earnings per share for the first quarter, while revenue beat expectations by $20 million. The company attributed the revenue beat to strong growth in its footwear and international businesses. It is unclear how this will affect Under Armour’s market and earnings in the long term. The company is facing increased competition from the likes of Nike and Adidas, and it is possible that this quarter’s results are not indicative of future performance.
Market Reaction
On Wednesday, Under Armour stock opened at $9.4 and closed at $9.3, up by 1.4% from previous closing price of 9.2. This was in response to the company’s release of their in-line Q1 EPS and revenue that beat by $20M. While the news was mostly mixed, investors seemed to respond positively to the results.
VI Analysis
Company’s fundamentals reflect its long term potential. Based on VI Risk Rating, UNDER ARMOUR is a medium risk investment in terms of financial and business aspects. Potential risks areas in UNDER ARMOUR’s business and financials are: 1) Business: UNDER ARMOUR is facing increased competition from other sportswear companies. In particular, Nike and Adidas are encroaching on UNDER ARMOUR’s turf with their own lines of performance apparel.
Summary
Under Armour (UA) reported first-quarter earnings that were in line with analysts’ expectations, while revenue beat by $20 million. The mixed news caused the stock price to rise 1.4% the following day. The company’s revenue was driven by strong growth in its international business, which offset a decline in North American sales. Under Armour’s earnings were hurt by higher costs, including higher marketing expenses as the company ramps up its efforts to grow in international markets. The company’s gross margin also declined in the quarter. Despite the mixed results, investors appeared to be encouraged by Under Armour’s growth in international markets and the company’s efforts to control costs. The stock price rose 1.4% the following day.
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