Under Armour: Still Dirt Cheap
Update - Feb. 8
Shorts are going to hate not listening and buying the dip on Under Armour. The stock should quickly close the gap to $13 on $UA.
-Q3 Non-GAAP EPS of $0.16 beats by $0.07.
-Revenue of $1.58B (+3.3% Y/Y) beats by $30M.
-Adjusted diluted earnings per share is now expected to be $0.52 to $0.56 versus the previously expected range of $0.44 to $0.48 vs. $0.46 consensus
Update - Dec. 21
Under Armour up 4% on the better than expected report from Nike. Also, Nike has improved the inventory position since 90 days ago which should reduce the promotional environment hitting UA this year.
-Nike press release (NYSE:NKE): Q2 GAAP EPS of $0.85 beats by $0.21.
Revenue of $13.32B (+17.3% Y/Y) beats by $740M.
-Gross margin decreased 300 basis points to 42.9 percent.
-Inventories for NIKE, Inc. were $9.3 billion, up 43 percent compared to the prior year period, driven by an increase in units from lapping prior year supply chain disruption, as well as higher input costs.
-We believe the inventory peak is behind us as actions we're taking in the marketplace are working. Later in the call, Matt will share more about our progress on inventory in North America and a return to healthy inventory levels in China.
-First, inventory dollars and units are down sequentially. Prior year comparisons are distorted by last year's Vietnam factory closures. But compared to the prior quarter, inventory dollars were down 3% and units are down high single digits, with days in inventory at the lowest level in four quarters.
Original article posted on Dec. 5
- Under Armour has rebounded in the last month, but the stock is still overlooked by the market.
- The athletic apparel company continues to advance innovation and better control inventory than larger peer Nike.
- The stock has a $1+ EPS potential in a less promotional environment in 2023.
- This idea was discussed in more depth with members of my private investing community, Out Fox The Street. Learn More »