Under Armour, Inc. UAA is scheduled to report first-quarter 2020 results on May 11, before the opening bell. This Baltimore, MD-based company reported in-line earnings for fourth-quarter 2019, with a beat in the previous two quarters.
However, the Zacks Consensus Estimate for first-quarter loss is pegged at 18 cents, which has widened 2 cents over the past 30 days. We note that the company delivered earnings of 5 cents in the same quarter a year ago. The consensus estimate for quarterly revenues stands at $961.8 million, which indicates a decline of more than 20% from the year-ago quarter.
Under Armour, Inc. Price and EPS Surprise
Under Armour, Inc. price-eps-surprise | Under Armour, Inc. Quote
Key Things to Note
Under Armour has been under pressure due to uncertainty regarding the coronavirus pandemic, which has led to store closures effective Mar 16. Also, it has called off first-quarter guidance and has taken several actions to stay firm during such a crisis. It has decided to cut pay, temporarily lay off associates and has been monitoring the global situation closely. Loss of sales from closed stores has most likely marred the company’s performance in the first quarter. Again, adverse impact of foreign currency translation along with stiff competition from prominent retailers cannot be ignored.
We note that the Zacks Consensus Estimate for first-quarter revenues at North America, EMEA, Asia-Pacific and Latin America segments are pinned at $669 million, $137 million, $92 million and $53 million, respectively. While these figures suggest respective declines of 20.7% and 36.2% for North America and Asia-Pacific, the same for EMEA and Latin America indicate growth of 2.2% and 7.7%, year over year. Furthermore, the Zacks Consensus Estimate for quarterly revenues for Apparel, Accessories and Footwear categories are pegged at $611 million, $65 million and $261 million, respectively. These estimates indicate decrease of 21.1%, 20.7% and 10.8%, respectively, year over year. Moreover, the consensus mark for Licensing stands at $15 million, depicting a decline of 30.9% from the same quarter a year ago.
Nevertheless, Under Armour has been progressing with its multi-year transformation plan and is focused on strengthening brand through enhanced customer connections, effective innovation and strict go-to-market process. Also, the expansion of direct-to-consumer business, product innovation and foray into the technology-based fitness businesses appear encouraging. Apparently, the consensus estimate revenue for Connected Fitness stands at $32.6 million, which suggests an increase of 8.3% from the same quarter last year.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Under Armour this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Under Armour has a Zacks Rank #3 and an Earnings ESP of +0.70%.
More Stocks With a Favorable Combination
Here are some more companies that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around:
BJ's Wholesale Club Holdings BJ has an Earnings ESP of +7.00% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kroger KR has an Earnings ESP of +11.86% and a Zacks Rank #2.
Casa Systems CASA has an Earnings ESP of +25.00% and a Zacks Rank #3.
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