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How Did Under Armour Reaffirm Its 2016 Outlook?

Gabriel Kane

Friday’s Consumer Pops and Drops: CALM, MAT, TSN, and UA

(Continued from Prior Part)

Price movement 

Under Armour (UA) has a market cap of 18.2 billion. It rose by 1.1%. It closed at $84.00 per share as of March 4, 2016. The price movement on a weekly, monthly, and YTD (year-to-date) basis is 0.23%, 3.8%, and 4.2%, respectively.

Currently, Under Armour is trading 5.2% above its 20-day moving average, 8.0% above its 50-day moving average, and 4.5% below its 200-day moving average.

The Guggenheim S&P 500 Pure Growth ETF (RPG) invests 1.2% of its holdings in Under Armour. RPG tracks an index of primarily large and mid-cap companies with strong growth characteristics. The index selects companies from the S&P 500 Index. It selects companies based on three growth factors. RPG’s YTD price movement is -5.0% as of March 3, 2016.

Under Armour’s competitors and their market caps are:

  • Nike (NKE) – $104.3 billion
  • Skechers USA (SKX) – $5.3 billion
  • Columbia Sportswear (COLM) – $4.2 billion

Under Armour reaffirmed its 2016 outlook

Under Armour reaffirmed its fiscal 2016 outlook.

  • Net revenue of ~$4.95 billion—growth of 25% over fiscal 2015
  • Operating income of ~$503 million—growth of 23% over fiscal 2015
  • Tax rate of 38.5%
  • Interest expense of ~$35 million

The company will support The Sports Authority through restructuring. It plans to offset the impact of the bankruptcy on its fiscal 2016 results through continued sales to The Sports Authority and sales through other channels and customers. It assumes that the receivables from The Sports Authority won’t be impacted by these developments.

Performance in 4Q15 and 2015

Under Armour reported fiscal 4Q15 net revenue of $1,170.7 million—a rise of 30.8% compared to net revenue of $895.2 million in fiscal 4Q14. The revenue of licensing and connected fitness rose by 43.1% and 220.8%, respectively, in fiscal 4Q15—compared to fiscal 4Q14. The company’s cost of goods sold as a percentage of net revenue rose by 3.8%. Its gross profit margin fell by 3.8% in fiscal 4Q15—compared to fiscal 4Q14.

Its net income and EPS (earnings per share) rose to $105.6 million and $0.48, respectively, in fiscal 4Q15—compared to $87.7 million and $0.40, respectively, in fiscal 4Q14.

Fiscal 2015 results

In fiscal 2015, Under Armour reported net revenue of $3,963.3 million—a rise of 28.5% year-over-year. The factory house and brand house door count rose to 161 and 30, respectively, in fiscal 2015.

Also, the company’s net income and EPS rose to $232.6 million and $1.05, respectively, in fiscal 2015—compared to $208.0 million and $0.95, respectively, in fiscal 2014.

It reported cash and cash equivalents of $129.9 million in fiscal 2015—compared to $593.2 million in fiscal 2014. Its inventories rose by 45.9% in fiscal 2015. Its DE (debt-to-equity) ratio rose to 0.72x in fiscal 2015—compared to the DE ratio of 0.55x in fiscal 2014.

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