Categories Consumer

Under Armour (UAA) stock drops after survey warns of weakening shoe sales

The continuing slowdown in sales in the local market seems to be taking a toll on Under Armour (NYSE: UAA), despite the efforts to revive performance in North America. The sports apparel maker’s stock suffered on Tuesday after a popular market survey revealed the company is losing market share to rivals Nike (NYSE: NKE) and Adidas.

The latest Athletic Footwear and Apparel Brands survey, conducted by research firm B. Riley FBR, showed that consumers look elsewhere to purchase fashionable apparels and sportswear. People’s fast-changing brand preferences and the growing adoption of direct-to-customer sales model are the main headwinds currently facing Under Armour.

The data indicate that overall athletic footwear sales softened in 2019, compared to last year. Concerned over the fact that in footwear sales, the gap between Under Armour and its rivals has widened in the last couple of years, B. Riley reaffirmed its sell rating on the company and set the price target at $12.

Concerned over the growing gap between Under Armour and its rivals in sales, the research firm reaffirmed its sell rating on the company

In other words, companies that innovate extensively, both in terms of fashion and infrastructure, and incorporate the latest technology into their digital channels drive customers to physical and virtual stores. Currently, Nike, Reebok (RBK) and Adidas hold the top three positions in various categories.

While Under Armour stays at the third position in the apparels section, it has fallen below the market-leaders in the sneaker category. And, the primary factor that differentiates the company from others is the absence of innovation.

Related: Under Armour stock jumps on upbeat Q4 results

Stock performance

Under Armour might not be a good investment option under the present conditions as there is no guarantee that the recent uptick will be sustained in the coming weeks. The consensus rating by analysts covering the stock is hold. The average price target is approximately $20, which is broadly in line with Tuesday’s closing price.

Under Armour’s shares closed the day’s trading down 4%, after opening the session on a positive note. They have gained 31% in the past twelve months and 14% since the beginning of 2019 but remain far below the long-term average.

Listen to publicly listed companies’ earnings conference calls along with the edited closed caption text

Most Popular

V Earnings: Key quarterly highlights from Visa’s Q1 2023 financial results

Visa Inc. (NYSE: V) reported first quarter 2023 earnings results today. Net revenues grew 12% year-over-year to $7.9 billion. GAAP net income rose 6% to $4.2 billion while EPS grew

Earnings: Highlights of Intel’s (INTC) Q4 2022 financial results

Intel Corporation (NASDAQ: INTC) Thursday reported a decline in adjusted earnings and revenues for the fourth quarter. The semiconductor giant also provided guidance for the first quarter of 2023. Fourth-quarter

McCormick (MKC) expects to drive sales growth in 2023 through pricing actions and cost savings

Shares of McCormick & Company Inc. (NYSE: MKC) were down over 5% on Thursday after the company missed expectations on its fourth quarter 2022 results and provided a lower-than-expected earnings

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top