Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Under Armour Up More Than 18% In 3 Months: More Room To Run?

By Zacks Investment ResearchStock MarketsJun 11, 2019 09:29PM ET
Under Armour Up More Than 18% In 3 Months: More Room To Run?
By Zacks Investment Research   |  Jun 11, 2019 09:29PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Under Armour, Inc.’s (NYSE:UAA) consistent focus on brand development as well as expansion of DTC and technology-based fitness businesses bodes well. Further, the company is progressing well with its multi-year transformation plan and has undertaken other long-term growth strategies. Such well-chalked efforts led to better-than-expected first-quarter results. Encouraged by these factors, management has raised 2019 view.

The company now expects 2019 earnings per share of 33-34 cents compared with the prior projection of 31-33 cents. This shows year-over-year increase from 27 cents reported in 2018. Management envisions net revenues to increase 3-4%. Under Armour anticipates gross margin to improve 70-90 bps. The expansion is expected to be backed by favorable channel mix, stemming from reduced planned sales to off-price networks and increased proportion of direct-to-consumer sales. Also, reduced product expenses, owing to supply-chain efforts, are expected to drive gross margin.

Backed by these tailwinds, shares of this Zacks Rank #2 (Buy) company have rallied 18.5% in the past three months compared with the industry’s rise of 0.9%.

Let’s take a closer look at the aspects driving the company’s performance.

Factors Driving the Stock

Under Armour is leaving no stone unturned to attract customers. It is entering the business of fitness gadgets and other tracking platforms. In doing so, the company is actively pursuing acquisitions to expand its reach in the fitness space. Some of its notable buyouts include MapMyFitness, Endomondo and MyFitnessPal. By acquiring these fitness technology companies, Under Armour has enriched its digital capabilities, which enable it to launch digital products and fitness tracking platforms, while promoting its own products.

Further, the company focuses on its transformation plan that aims at strengthening its brand through enhanced customer connections, effective innovations and strict go-to-market process. This apart, management has undertaken long-term plans to ensure business growth in the next five years. The company plans to introduce improved athletic products along with increased investment in direct-to-consumer, international, women's and footwear businesses. We note that Under Armour has been making efforts to boost its direct-to-consumer business through store expansion and enhancement of its e-commerce platform. In the first quarter of 2019, direct-to-consumer business’ contribution was 27% of global revenues. Management expects this business to increase at a mid-single-digit rate in 2019.

Based on such strategic plans, the company expects the top line to increase in low-double-digit rate in 2023. Further, earnings per share are expected to advance 40% on a five-year compounded annual growth rate basis.

3 More Stocks to Bank On

Children’s Place (NASDAQ:PLCE) , with a long-term earnings per share (EPS) growth rate of 8%, sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

L Brands (NYSE:LB) , with a long-term EPS growth rate of 11%, carries a Zacks Rank #2.

Kering (PA:PRTP) SA (OTC:PPRUY) , with a long-term EPS growth rate of 10%, carries a Zacks Rank #2.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Kering SA (PPRUY): Free Stock Analysis Report

L Brands, Inc. (LB): Free Stock Analysis Report

Children's Place, Inc. (The) (PLCE): Free Stock Analysis Report

Under Armour, Inc. (UAA): Free Stock Analysis Report

Original post

Zacks Investment Research
Under Armour Up More Than 18% In 3 Months: More Room To Run?

Related Articles

Under Armour Up More Than 18% In 3 Months: More Room To Run?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email