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Under Armour (UAA)
NYSE:UAA
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Under Armour
(NYSE:UAA)
42Neutral
Positive Factors
Earnings
Stronger than expected Q3 results have led to an increase in EPS forecasts.
Gross Margin
The company is showing pricing discipline resulting in strong gross margin expansion.
Leadership
The hiring of Eric Liedtke as EVP of brand strategy is showing positive results, with improvements in brand strategy execution.
Negative Factors
APAC Performance
APAC region struggling, with sales in the region down 5% amid a highly competitive and promotional landscape.
Competition
Considerable competition for consumer acquisition and retention renders future financial modeling complex.
Revenue Guidance
Implied F4Q25 guidance for revenue and adj. EPS compares unfavorably to prior estimates, due to a soft Spring/Summer order book, softness in APAC, and additional FX headwinds.
Under Armour (UAA) vs. S&P 500 (SPY)
Market Cap
$2.26B
Dividend YieldN/A
Average Volume (3M)13.44M
Price to Earnings (P/E)―
Beta (1Y)1.11
Revenue Growth-7.47%
EPS Growth-131.70%
CountryUS
Employees6,800
SectorConsumer Cyclical
Sector Strength46
IndustryApparel - Manufacturers
Share Statistics
EPS (TTM)-0.31
Shares Outstanding188,822,720
10 Day Avg. Volume13,392,707
30 Day Avg. Volume13,441,090
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.52
Price to Cash Flow (P/CF)2.20
P/FCF Ratio2.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$9.49Price Target Upside77.05% Upside
Rating ConsensusHold
Number of Analyst Covering17
Under Armour Business Overview & Revenue Model
Company DescriptionUnder Armour, Inc. (UAA) is a prominent American sportswear and equipment company that specializes in the design, manufacturing, and distribution of performance apparel, footwear, and accessories. The company operates in the athletic apparel sector and is known for its innovative use of technology and materials to enhance athletic performance. Under Armour's product offerings cater to a wide range of sports and activities, providing athletes and fitness enthusiasts with gear that combines style, comfort, and functionality.
How the Company Makes MoneyUnder Armour generates its revenue primarily through the sale of its branded performance apparel, footwear, and accessories. The company's revenue streams are diversified across wholesale, direct-to-consumer, and licensing operations. The wholesale segment involves selling products to retail stores and distributors, while the direct-to-consumer segment includes sales through Under Armour-branded stores and its online platform. Additionally, Under Armour benefits from licensing agreements that allow third parties to produce and sell products under the Under Armour brand. Key factors contributing to its earnings include strategic partnerships with athletes, sports teams, and events, which enhance brand visibility and consumer engagement. The company also invests in technology and innovation to maintain a competitive edge in the sportswear market.
Under Armour Financial Statement Overview
Summary
Under Armour is facing financial challenges with declining revenue and profitability. Despite a stable balance sheet with moderate leverage, its cash flow generation is weak, impacting its overall financial health. The company needs to focus on improving operational efficiencies and cash flow management to enhance its financial standing.Income Statement
Under Armour's TTM data shows a decline in revenue and profitability. The gross profit margin is approximately 47.5%, indicating a decent gross profitability, but the company is currently experiencing a net loss, reflected by a negative net profit margin of -2.52%. The EBIT and EBITDA margins are also weak at -2.25% and 0.29% respectively, indicating challenges in operational efficiency and profitability.45
Neutral
Balance Sheet
The company has a moderate debt-to-equity ratio of about 0.66, suggesting a balanced use of debt and equity. However, the return on equity is negative, reflecting current financial underperformance. The equity ratio stands at 42.9%, indicating a stable financial structure with a reasonable level of equity in the assets.60
Neutral
Cash Flow
Under Armour's TTM cash flow statement highlights challenges in cash generation with a negative free cash flow. The operating cash flow to net income ratio is low, reflecting inefficiencies in cash generation from operational activities. The negative free cash flow to net income ratio further underscores liquidity pressures.40
Negative
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 5.32B | 5.70B | 5.90B | 5.68B | 4.47B | 5.27B | Gross Profit |
| 2.52B | 2.63B | 2.65B | 2.86B | 2.16B | 2.47B | EBIT |
| -119.60M | 229.75M | 283.81M | 486.29M | -613.44M | 236.77M | EBITDA |
| 15.34M | 372.34M | 421.43M | 708.47M | 321.30M | 417.51M | Net Income Common Stockholders |
| -134.07M | 232.04M | 386.77M | 360.06M | -549.18M | 92.14M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 165.96M | 858.69M | 711.91M | 1.67B | 1.52B | 788.07M | Total Assets |
| 549.25M | 4.76B | 4.86B | 4.99B | 5.03B | 4.84B | Total Debt |
| 17.91M | 1.44B | 1.52B | 1.50B | 2.01B | 1.30B | Net Debt |
| -148.05M | 584.10M | 809.27M | -165.15M | 488.17M | 511.15M | Total Liabilities |
| 136.40M | 2.61B | 2.86B | 2.90B | 3.35B | 2.69B | Stockholders Equity |
| 412.85M | 2.15B | 2.00B | 2.09B | 1.68B | 2.15B |
| Cash Flow | Free Cash Flow | ||||
| -153.66M | 203.64M | -197.71M | 595.07M | 120.57M | 363.23M | Operating Cash Flow |
| 3.73M | 353.97M | -9.91M | 664.83M | 212.86M | 509.03M | Investing Cash Flow |
| -116.73M | -105.33M | -152.80M | -68.35M | 66.34M | -147.11M | Financing Cash Flow |
| -158.16M | -78.69M | -126.38M | -418.74M | 436.85M | -137.07M |
Under Armour Technical Analysis
Negative
5.36
Price Trends
7.15
Negative
8.13
Negative
7.94
Negative
Market Momentum
-0.27
Positive
37.50
Neutral
25.76
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UAA, the sentiment is Negative. The current price of 5.36 is below the 20-day moving average (MA) of 6.62, below the 50-day MA of 7.15, and below the 200-day MA of 7.94, indicating a bearish trend. The MACD of -0.27 indicates Positive momentum. The RSI at 37.50 is Neutral, neither overbought nor oversold. The STOCH value of 25.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UAA.
Under Armour Risk Analysis
Under Armour disclosed 36 risk factors in its most recent earnings report. Under Armour reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Under Armour Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $12.23B | 18.04 | 27.57% | 1.67% | 5.23% | 24.63% | |
75 Outperform | $35.16B | 19.20 | 42.42% | ― | 10.07% | 20.40% | |
63 Neutral | $3.72B | 17.61 | 12.01% | 1.78% | -3.35% | -6.09% | |
63 Neutral | $82.21B | 18.49 | 31.93% | 2.77% | -7.16% | -12.12% | |
59 Neutral | $12.18B | 11.09 | -1.08% | 3.77% | 1.26% | -19.82% | |
50 Neutral | $4.55B | ― | -16.13% | 3.08% | -8.42% | 57.91% | |
42 Neutral | $2.26B | ― | -6.12% | ― | -7.47% | -131.70% |
* Consumer Cyclical Sector Average
Performance Comparison
UAA
Under Armour
5.26
-1.54
-22.65%
COLM
Columbia Sportswear
68.84
-6.44
-8.55%
LULU
Lululemon Athletica
263.70
-96.76
-26.84%
NKE
Nike
57.25
-31.10
-35.20%
RL
Ralph Lauren
197.62
29.69
17.68%
VFC
VF
11.56
-1.68
-12.69%
Under Armour Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -34.95% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
While Under Armour's gross margin exceeded expectations and there were notable achievements in product launches and loyalty growth, significant declines in North America and APAC revenue, along with increased SG&A expenses, present challenges. The company's focus on repositioning and strategic adjustments shows promise but faces headwinds in certain regions.Highlights
Strong Gross Margin Performance
The fiscal third quarter results exceeded expectations, driven by strong gross margin performance with an increase of 240 basis points year-over-year to 47.5%.
Revenue Exceeding Forecasts
Revenue surpassed forecasts with a decline of 6% to $1.4 billion, which was better than the expected 10% decline.
EMEA Region Growth
Revenue in EMEA increased by 5% or 3% on a currency-neutral basis, with growth in DTC and full-priced wholesale business.
New Innovative Products Launched
Launch of the Curry Brand athlete De'Aaron Fox's first signature shoe, the Fox 1, which features patented flow sole technology.
Increase in Loyalty Membership
During the quarter, Under Armour gained 4 million new loyalty members in North America, raising the total to 17 million.
Improved Full-Year Outlook
Full-year revenue expectation improved to a decline of approximately 10%, better than the previous outlook of low-double-digit contraction.
Lowlights
North America Revenue Decline
North America experienced an 8% revenue decline mainly due to a decrease in DTC business, affected by lower eCommerce sales due to reduced promotions.
APAC Revenue Decline
APAC revenue fell by 5% or 6% on a currency-neutral basis due to a highly competitive and promotional landscape.
Latin America Revenue Decline
Revenue in Latin America declined by 16% or 9% on a currency-neutral basis, mainly due to lower distributor sales.
Decrease in Direct-to-Consumer Revenue
Direct-to-consumer revenue declined by 9%, mainly due to a 20% decrease in eCommerce driven by reduced promotions and discounts.
SG&A Expenses Increase
SG&A expenses rose 6% to $638 million, including a $28 million impairment charge not included in the fiscal 2025 restructuring plan.
Company Guidance
During Under Armour's third quarter of fiscal 2025 earnings call, the company provided updated guidance, showing optimism as they exceeded expectations with a revenue decline of 6% to $1.4 billion, surpassing the anticipated 10% drop. Gross margin improved by 240 basis points to 47.5%, driven by supply chain benefits and reduced discounting. North America's revenue saw an 8% decline, and APAC faced a 5% decrease, while EMEA reported a 5% increase. The company raised its full-year outlook, expecting a revenue decline of approximately 10%, refining its gross margin projection to an improvement of 160 basis points, and increasing adjusted operating income to $185 million to $195 million. Adjusted SG&A expenses are projected to decrease at a low-single-digit rate as Under Armour continues to prioritize brand and operational investments.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.