U.S. markets closed
  • S&P Futures

    4,143.75
    +11.50 (+0.28%)
     
  • Dow Futures

    34,099.00
    -49.00 (-0.14%)
     
  • Nasdaq Futures

    12,523.25
    +109.00 (+0.88%)
     
  • Russell 2000 Futures

    1,967.70
    -0.70 (-0.04%)
     
  • Crude Oil

    77.05
    +0.64 (+0.84%)
     
  • Gold

    1,968.00
    +25.20 (+1.30%)
     
  • Silver

    24.30
    +0.69 (+2.93%)
     
  • EUR/USD

    1.1022
    +0.0028 (+0.25%)
     
  • 10-Yr Bond

    3.3970
    -0.1320 (-3.74%)
     
  • Vix

    17.87
    -1.53 (-7.89%)
     
  • GBP/USD

    1.2381
    +0.0009 (+0.07%)
     
  • USD/JPY

    128.5570
    -0.3680 (-0.29%)
     
  • BTC-USD

    23,976.55
    +858.66 (+3.71%)
     
  • CMC Crypto 200

    546.58
    +303.90 (+125.23%)
     
  • FTSE 100

    7,761.11
    -10.59 (-0.14%)
     
  • Nikkei 225

    27,432.45
    +85.57 (+0.31%)
     

Under Armour (UAA) Lined Up for Q2 Earnings: What's in Store?

Under Armour, Inc.’s UAA top line is expected to remain almost flat year over year when it reports second-quarter fiscal 2023 earnings on Nov 3 before market open. The Zacks Consensus Estimate for revenues stands at $1,555 million, indicating a marginal increase of about 0.6% from the prior-year period’s reported figure.

The bottom line of this developer, marketer and distributor of apparel, footwear and accessories is expected to decrease from the prior-year quarter’s reading. The Zacks Consensus Estimate of 16 cents for earnings per share in the second quarter has been stable over the past 30 days. The figure suggests a sharp decline from the earnings of 31 cents reported in the year-ago period.

This Baltimore, MD-based player has a trailing four-quarter earnings surprise of 28.8%, on average.

Key Things to Note

The second quarter of fiscal 2023 might have been another soft one for Under Armour, at least consensus numbers say so. A competitive landscape, supply-chain issues and higher shipping costs might have hurt the company’s performance. Also, a highly promotional environment and adverse foreign currency might have been added deterrents.

On its last earnings call, Under Armour guided second-quarter revenues to be flat to up marginally on a reported basis and rise at a low-to-mid-single-digit rate on a currency-neutral basis. This includes about five percentage points of headwinds from proactive reductions and cancellations to order books due to pandemic-related supply constraints.

Management projected a gross margin contraction of approximately 550 to 600 basis points for the second quarter due to an adverse impact of elevated promotional activities, higher freight expenses, shifts and a channel mix and increasing pressures from changes in foreign currency.

The company guided the second-quarter operating income between $105 million and $115 million, down from the adjusted operating income of $188.8 million in the year-ago period. It envisions earnings in the band of 15 cents-17 cents a share, down from the adjusted earnings of 31 cents reported in the prior-year quarter.

On the flip side, Under Armour’s robust operating model, strength in the direct-to-consumer business and investments in products and marketing might have cushioned its quarterly performance. The company’s strategy to focus on improving sales through product innovation, investments in its stores and acceleration of e-commerce capabilities and selling more inventory at a full price bodes well.

Under Armour, Inc. Price, Consensus and EPS Surprise

Under Armour, Inc. Price, Consensus and EPS Surprise
Under Armour, Inc. Price, Consensus and EPS Surprise

Under Armour, Inc. price-consensus-eps-surprise-chart | Under Armour, Inc. Quote

A Sneak Peek Into Estimates

We note that the Zacks Consensus Estimate for Apparel and Accessories categories’ revenues for the second quarter is pegged at $1,014 million and $113 million, respectively. These indicate a decline of 4.2% and 10.6%, respectively, from the corresponding year-ago fiscal period’s actuals.

The consensus mark for Footwear stands at $331 million, suggesting a marginal increase of 0.4% from the prior-year fiscal quarter’s reading.

The Zacks Consensus Estimate for revenues in the North America and Latin America segments is pegged at $998 million and $48.1 million, respectively. These figures suggest a decline of 3.7% and 14.7% each for North America and Latin America from the comparable year-earlier fiscal quarter’s tallies.

The Zacks Consensus Estimate for revenues of $218 million and $206 million for the EMEA and the Asia-Pacific, respectively, suggests a corresponding decline of 9.6% and 2.8% from the year-ago fiscal period’s actuals.

What Does the Zacks Model Unveil?

Our proven model predicts an earnings beat for Under Armour this time. 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, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Under Armour has a Zacks Rank #3 and an Earnings ESP of +1.02%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks With the Favorable Combination

Here are three other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:

Crocs CROX currently has an Earnings ESP of +1.48% and a Zacks Rank #1. The company is expected to register bottom-line growth when it reports third-quarter 2022 results. The Zacks Consensus Estimate for quarterly earnings per share of $2.57 suggests an increase of 4.1% from the year-ago quarter.

Crocs’ top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $941.9 million, indicating an increase of 50.5% from the figure reported in the year-ago quarter. Crocs has a trailing four-quarter earnings surprise of 21.9%, on average.

Gildan Activewear GIL currently has an Earnings ESP of +1.24% and a Zacks Rank #3. The company is expected to register bottom-line growth when it reports third-quarter 2022 results. The Zacks Consensus Estimate for quarterly earnings per share of 81 cents suggests an increase of 1.3% from the year-ago quarter.

Gildan Activewear’s top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $834.6 million, indicating an increase of 4.1% from the figure reported in the year-ago quarter. Gildan Activewear has a trailing four-quarter earnings surprise of 33.8%, on average.

Builders FirstSource BLDR currently has an Earnings ESP of +3.44% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports third-quarter 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.53 suggests an increase of 4.1% from the year-ago reported number.

Builders FirstSource’s top line is expected to decrease year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.22 billion, which suggests a decrease of 5.3% from the prior-year quarter. BLDR has a trailing four-quarter earnings surprise of 88.6%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Builders FirstSource, Inc. (BLDR) : Free Stock Analysis Report
 
Crocs, Inc. (CROX) : Free Stock Analysis Report
 
Gildan Activewear, Inc. (GIL) : Free Stock Analysis Report
 
Under Armour, Inc. (UAA) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research