Under Armour (UAA) is slated to release financial results for the fourth quarter Tuesday before the opening bell. Over the last few weeks, analysts have maintained their estimates for the sports apparel retailer, with revenues projected to gain modestly year-over-year to $1.38 billion. The company, which recorded nil profit in the prior-year quarter, is expected to earn $0.04 per share this time.
Beating the odds, such as competition and pricing issues, the company reported better than expected results in three of the four trailing quarters. It is widely expected that the management’s expansion initiatives, with focus on the overseas market, will continue to drive growth.
In the September quarter, adjusted earnings climbed to $0.25 per share and topped expectations on the back of a 2.4% rise in revenues to $1.4 billion. Then, a double-digit growth in international sales more than offset a decline in North America.
Sales are seen picking up further momentum internationally, even as a full-fledged reorganization is currently underway in North America with the goal of streamlining operations. The management’s latest outlook points to further softness in the local market, probably to a greater degree compared to last year, due to the restructuring program.
Sales are expected to pick up further momentum internationally, even as a reorganization is underway in North America
For most apparel and sportswear manufacturers, North America continues to be a challenging market, due to people’s changing shopping habits and stiff competition. Experts believe that Under Armour needs to change its business model in order to regain the lost ground, with more focus on the online platform that allows direct-to-customer sales while also continuing the store expansion initiatives.
Meanwhile, the company’s diversification into the fitness gadgets business, marked by multiple acquisitions, has been yielding the desired results.
Among the other sportswear manufacturers, Skechers (SKX) this week reported double-digit growth in fourth-quarter earnings and revenues, helped by the strength of international operations. Dick’s Sporting Good (DKS) will be announcing the latest quarterly results on March 12 before the market opens, while Nike (NKE) is scheduled to report third-quarter numbers on March 21.
After falling to a historical low nearly three years ago, Under Armour shares have traded sharply lower. The stock gained about 50% since last year, gathering further strength as it entered 2019.
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