Under Armour Inc (UAA) Tops Q3 EPS by 23c, Offers FY Guidance

Under Armour Inc (NYSE: UAA) reported Q3 EPS of $0.26, $0.23 better than the analyst estimate of $0.03. Revenue for the quarter came in at $1.4 billion versus the consensus estimate of $1.16 billion.

GUIDANCE:

Under Armour Inc sees FY2020 EPS of ($0.47)-($0.49), versus the consensus of ($0.72).

• Revenue is expected to be down at a high-teen percentage rate compared to 2019 results, reflecting a low twenties percentage rate decline in North America and a high-single-digit percentage rate decline within the international business. For the fourth quarter, the company now expects revenue to be down at a low-teen percentage rate, versus the previous down 20 to 25 percent expectation, impacted by the following factors:
• Expected year-end timing impacts from COVID-19, related to customer order flow and changes in supply chain timing resulting in more planned spring product deliveries in early 2021 versus late 2020.
• An anticipated substantial decline in licensing revenue due to lower contractual royalty minimums and contract settlements realized in the prior year.
• Lower planned excess inventory sales to the off-price channel.
• Gross margin is expected to be up 20 to 40 basis points versus 2019 due to channel mix benefits and supply chain efficiencies, offset mainly by discounting related to COVID-19. For the fourth quarter, the company anticipates meaningful gross margin pressure primarily related to expectations around a more promotional environment relative to the prior year.
• Operating loss is expected to reach approximately $800 million to $860 million. Excluding the impact of restructuring and impairment charges, adjusted operating loss is expected to reach approximately $140 million to $150 million.
• Adjusted interest and other expense net is planned at approximately $55 million.
• Adjusted diluted loss per share is expected to be in the range of $0.47 to $0.49.
• Inventory is expected to be up approximately 10 percent at the end of 2020.
• Capital expenditures are planned at approximately $80 million compared to $144 million in 2019.

For earnings history and earnings-related data on Under Armour Inc (UAA) click here.

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