Under Armour (NYSE:UAA) shares jumped nearly 6% today after the branded athletic performance apparel and products provider announced its results for the third quarter. Revenue declined by 6% year-over-year to $1.5 billion, landing in line with estimates. EPS of $0.19, on the other hand, beat expectations by $0.08.
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During the quarter, Wholesale revenue declined by 13% to $712 million. In contrast, direct-to-consumer revenue increased by 4% to $741 million. This increase was primarily driven by higher owned and operated store revenue and gains in eCommerce sales. While North American sales dropped by 12%, UAA’s International business sales ticked higher by 7% due to strength in the Asia-Pacific, EMEA, and Latin America regions. Still, the company’s Footwear and Apparel revenue declined by 7% and 6%, respectively.
At the same time, lower freight expenses helped UAA improve its gross margin by 100 basis points to 45.2%. For Fiscal Year 2024, Under Armour expects a revenue decline of 3%-4% versus the prior estimates of a 2%-4% decline. Gross margin is expected to improve by 120-130 basis points compared to the prior expected improvement of 100-125 basis points. Adjusted EPS for the year is seen landing between $0.50 and $0.52.
Is UAA a Good Stock to Buy?
Overall, the Street has a Moderate Buy consensus rating on Under Armour. Following a nearly 37% decline in the company’s share price over the past year, the average UAA price target of $9.46 implies a 22.9% potential upside in the stock.
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