Under Armour Inc (UAA) (UA) Misses Q1 EPS by 6c, Offers Guidance

Under Armour Inc (NYSE: UAA) reported Q1 EPS of ($0.01), $0.06 worse than the analyst estimate of $0.05. Revenue for the quarter came in at $1.3 billion versus the consensus estimate of $1.32 billion.

GUIDANCE:

Under Armour Inc sees FY2022 EPS of $0.63-$0.68, versus the consensus of $0.77.

• Revenue is expected to increase 5 to 7 percent versus the comparable baseline period of $5.7 billion, reflecting a mid-single-digit growth rate in North America and a low-teens growth rate in the international business. This expectation includes approximately three percentage points of headwinds related to our strategic decision to work with our vendors and customers to cancel orders affected by capacity issues, supply chain delays, and emergent COVID-19 impacts in China.
• Gross margin is expected to be down 150 to 200 basis points compared to the baseline period's adjusted gross margin of 49.6 percent due to expected inflationary pressures on freight and product costs, unfavorable channel mix, and changes in foreign currency.
• Operating income is expected to reach $375 to $400 million versus the comparable baseline period adjusted operating income of $424 million.
• Diluted earnings per share is expected to be between $0.79 and $0.84 versus the comparable baseline period of $0.47. This includes a $0.28 benefit related to a tax valuation allowance release expected to be realized in the fourth quarter. Of this $0.28 benefit, $0.16 of this amount is related to prior restructuring charges; therefore, adjusted diluted earnings per share is expected to be between $0.63 and $0.68. This is comparable to the adjusted baseline period of $0.68.

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