Under Armour Finds No Major Surprises In Q4, Analysts Cut Price Target

Shares of Under Armour Inc (NYSE:UAA) were declining in early trading on Wednesday, after the company Tuesday reported its fiscal fourth-quarter results.

Here are some key analyst takeaways.

• Truist Securities analyst Joseph Civello reaffirmed a Buy rating, while reducing the price target from $9 to $7.
• Stifel analyst Jim Duffy maintained a Buy rating, while cutting the price target from $11 to $10.
• Needham analyst Tom Nikic reiterated a Hold rating on the stock.

Check out other analyst stock ratings.

Truist Securities: Under Armour reported its fiscal fourth-quarter results broadly in line with expectations while providing mixed guidance. Lower promotions led to gross margin expansion, he added.

The company projected sales to decline by 4%-5% in the fiscal first quarter, coming in well below the prior consensus estimate of 1.6% growth, the analyst stated. "While we believe the company's efforts to elevate the brand's positioning are prudent, tariff-driven uncertainty makes us incrementally cautious on their ability to drive full-priced demand higher," he further wrote.

Stifel: Under Armour reported quarterly revenue of $1.18 billion, slightly above consensus of $1.16 billion, Duffy said. Gross margin expanded by 170 basis points to 46.7%, beating Street's 46.0% estimates, he added.

The company's year-on-year improvement was driven by "supply chain benefits including lower product and freight costs, favorable pricing, and positive impacts from product mix and FX, partially offset by an unfavorable channel and regional mix," the analyst wrote. Management guided to adjusted earnings of 1-3 cents per share for the fiscal first quarter, better than the Street's prior breakeven estimate, he further stated.

Needham: Under Armour's results were marginally better than expected, although its revenues are yet to bottom, Nikic said. With the company lowering discounts, revenues declined again, following an almost 10% downturn last year, he added.

The analyst stated that it is yet to be seen whether Under Armour's upcoming product seasons will "bear fruit on the top line. ” Management expects revenue to decline 4%- 5% in the fiscal first quarter.

UAA Price Action: Shares of Under Armour had declined by 0.56% to $6.24 at the time of publication on Wednesday.

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• Under Armour Faces Tough Road Ahead, Says Analyst

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