Under Armour (UAA) reports Q4 results on Tuesday: What to look for

Under Armour Inc. (NYSE: UAA) is slated to report its fourth quarter 2019 earnings results on Tuesday, February 11, before the market opens. The company is expected to deliver higher revenue and earnings for the period.

Analysts have projected earnings of $0.10 per share on revenues of $1.46 billion. This compares to EPS of $0.09 on revenue of $1.39 billion reported a year earlier. The topline number is expected to increase by 5%.

The connected fitness business has been a strong driver of revenue growth over the past two quarters and this trend can be expected to continue in the to-be-reported quarter as well. Last quarter, connected fitness saw a 22% increase in revenues.  

The company’s topline is also likely to benefit from growth in the apparel and accessories divisions, both of which saw single-digit increases last quarter. Under Armour’s international business has also been a solid growth driver, helping offset the weakness in North America. Favorable channel mix and supply chain initiatives are expected to benefit margins.

However, traffic and conversion challenges in the direct-to-consumer business as well as negative impacts from foreign currency are expected to dampen the quarterly results. The company is also likely to face headwinds from lower-than-planned excess inventory to service the off-price channel.

Also read: Pinterest Q4 2019 Earnings Report

This will be the first earnings report since Patrik Frisk assumed the role of CEO. Any updates on new strategies and initiatives will be worth noting.

In the third quarter of 2019, Under Armour reported better-than-expected revenue and earnings. Revenues declined 1% to $1.4 billion but beat forecasts, while EPS rose 35% to $0.23.

Under Armour has guided for full-year 2019 revenue to grow about 2%, which is below the earlier forecast for 3-4% growth.

The stock has gained over 15% in the past three months and the majority of analysts have rated it as Hold.

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