Under Armour, a sports equipment company, is set to report its fiscal fourth-quarter results on May 16. Despite a slowdown in growth in the North American retail segment and skepticism surrounding the return of founder Kevin Plank as CEO, the company is still performing well in other regions such as Europe and Asia Pacific. Under Armour is aiming to improve margins for FY’24, with a goal of gross margins increasing 120 to 130 basis points. The company’s geographic diversification, direct-to-consumer channels, and e-commerce strategies could lead to future net sales growth. For full year 2024, UA’s revenue is expected to be down 3-4% year-over-year with diluted earnings per share in the range of $0.57 to $0.59 and adjusted EPS of $0.50 to $0.52.
UA’s stock has seen a sharp decline of 55% over the past three years, underperforming the S&P 500 in each of those years. While it may face challenges in the uncertain macroeconomic environment, there is potential for recovery. Trefis’ forecast indicates that Under Armour’s valuation is $8 per share, which is around 20% higher than the current market price. The company’s revenues and earnings are expected to beat consensus estimates for Q4 2024, with Trefis estimating revenues of $1.4 billion and EPS of 8 cents. All segments of the company saw revenues decline year-over-year in Q3, with gross margins dropping to 45.2% due to inventory pressures in the industry.
With an earnings per share estimate of around 52 cents and a P/E multiple of 14.8x in fiscal 2024, Under Armour’s stock price estimate is higher than the current market price. The company’s forecasted revenues for fiscal 2024 are $5.8 billion, down 2% year-over-year. It is important to compare how UA’s stock stacks up against its peers, as seen in the Under Armour Peers analysis, to understand its performance metrics better. Despite the challenges faced by Under Armour in recent years, Trefis Market Beating Portfolios have outperformed the S&P 500 consistently over the same period, indicating potential for growth and recovery for the company in the future. Investors should keep an eye on Under Armour’s upcoming earnings report for insights into its performance and outlook.
