Under Armour (UA, UAA) is scheduled to report results of its third fiscal quarter before the market open on Friday, October 30, with a conference call scheduled for 8:30 am EDT. What to watch for:
1. GUIDANCE: On April 3, Under Armour withdrew its Q1 and full-year 2020 outlook provided in February as a result of ongoing disruption and uncertainty related to the global COVID-19 pandemic. On October 26, JPMorgan analyst Matthew Boss said recent work points to sequential sales acceleration, including a strong September to exit the quarter, Boss tells investors in a research note. This is driven by the increased shift towards health/wellness and casualization, says the analyst.
Deutsche Bank analyst Paul Trussell increased his revenue estimate "slightly" to take into account what he believes is conservative guidance, a strong September across retail, and continued consumer demand for athletic footwear and apparel. However, awaits increased clarity around the trajectory of revenue reacceleration next year as well as a better feel for the margin opportunity long-term.
2. RESTRUCTURING UPDATE: Last year, Under Armour approved a restructuring plan to better align its financial resources to support the company's efforts as the consumer landscape shifts. As part of the plan, Under Armour is cutting about 2% of its global workforce of 15,000. On September 8, Under Armour approved a $75M increase to its restructuring plan and said it would eliminate 600 global corporate employees.
3. STORE CHECKS: Piper Sandler analyst Erinn Murphy's store checks suggest Under Armour is less promotional year-over-year in outlets and inventory "appears clean," Murphy tells investors in a research note. While the analyst will not be surprised if trends were better versus guidance given the favorable athletic backdrop, she wants to see more evidence of improving brand momentum and "sticky" product innovation.
4. TEEN SURVEY: Piper Sandler's semiannual survey of 9,800 teens across 48 states with an average age 15.8 years showed that athletic brands dominate top fashion preferences, and while results were positive for rivals Nike (NKE) and Lululemon (LULU), the firm said results were negative for Under Armour.
Under Armour
+0.34 (+2.91%)
Under Armour
+0.495 (+3.72%)
Nike
+1.11 (+0.91%)
Lululemon
+0.73 (+0.22%)