Under Armour shares gain the most in 15 weeks on Tuesday, fourth-quarter revenue exceeds estimates, company reiterates full-year forecast

February 13, 2019 10:49 am

Under Armour Inc’s (UAA) fourth-quarter revenue, reported on Tuesday, outstripped Wall Street estimates, as the athletic apparel maker sold fewer products at a discount and more items at full price during the holiday shopping season.

Under Armour shares closed higher for a third consecutive trading session in New York on Tuesday. It has also been the sharpest daily surge since October 30th 2018. The stock went up 6.88% ($1.43) to $22.21, after touching an intraday high at $22.55, or a price level not seen since December 11th ($22.82).

Shares of Under Armour Inc have surged 25.69% so far in 2019 compared with a 9.49% gain for the benchmark index, S&P 500 (SPX).

In 2018, Under Armour’s stock went up 22.45%, thus, it again outperformed the S&P 500, which registered a 6.24% loss.

Total revenue went up to $1.39 billion during the quarter ended on December 31st from $1.37 billion in the year-ago period. In comparison, analysts on average had expected revenue of $1.38 billion.

Revenue in North America dropped 6% year-on-year to $965 million during the fourth quarter, while revenue from Under Armour Inc’s international business grew 24% year-on-year to $395 million.

The company said gross margin had risen 160 basis points to 45.0% during the fourth quarter from a year earlier, including a $2 million impact associated with restructuring operations.

Meanwhile, net income attributable to shareholders was reported at $4.2 million (or $0.01 per share) during the quarter ended on December 31st, after Under Armour posted a loss of $87.9 million (or $0.20 per share) in the year-ago period, when it incurred a one-time charge associated with the US tax code reform.

Excluding special items, the company’s net income was reported at $42 million (or $0.09 per share) during the latest quarter.

“Our 2018 results demonstrate significant progress against our multi-year transformation toward becoming an even stronger brand and more operationally excellent company,” Kevin Plank, Under Armour’s Chairman and Chief Executive Officer, said in a statement.

“As we look ahead to 2019, our accelerated innovation agenda, disciplined go-to-market process and powerful consumer-centric approach gives us increasingly greater confidence in our ability to deliver for Under Armour athletes, customers and shareholders,” Plank added.

Under Armour also reiterated full-year outlook, which it had provided on December 12th. The company said it expected full-year 2019 revenue growth of between 3% to 4% due to relatively flat results in North America and a low double-digit percentage growth in its international business. At the same time, Under Armour expects to earn between $0.31 and $0.33 per share for the full year.

According to CNN Money, the 27 analysts, offering 12-month forecasts regarding Under Armour Inc’s stock price, have a median target of $21.00, with a high estimate of $30.00 and a low estimate of $8.00. The median estimate represents a 5.45% downside compared to the closing price of $22.21 on February 12th.

The same media also reported that 18 out of 34 surveyed investment analysts had rated Under Armour Inc’s stock as “Hold”, while 6 – as “Buy”. On the other hand, other 6 analysts had recommended selling the stock.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for Under Armour Inc (UAA) are presented as follows:

Central Pivot Point – $20.69
R1 – $21.20
R2 – $21.65
R3 – $22.16
R4 – $22.67

S1 – $20.24
S2 – $19.73
S3 – $19.28
S4 – $18.83

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