Revenue expectations from Under Armour in 1Q16

Under Armour (UA) is slated to declare its 1Q16 results on April 21, 2016. According to the Wall Street analyst consensus, the company is expected to post revenues of $1.04 billion in the quarter, an increase of 28.8% over 1Q15.

Under Armour expects higher revenue growth in 1H16, compared to the second half of the year. Its top-line growth is expected to be in the high 20s, which is in line with the Wall Street consensus on the projected revenue growth rate in 1Q16.

What Is Wall Street Projecting for Under Armour’s 1Q16 Revenue?

Under Armour’s (UA) sales are expected to see higher-than-average growth (IWP) in the Footwear category, its International segment, and its Connected Fitness business. With part of the NBA season (including the All-Star game) and the Super Bowl falling in the first quarter, footwear sales should benefit.

Under Armour has also continued to create brand excitement with the launch of its slew of connected fitness products, including its first smart shoe, at the Consumer Electronics Show in January. While it may be too soon for these events to make a significant impact on the upcoming quarterly release, they are likely to have a larger impact in the next three quarters.

In preparation for August’s Summer Olympics in Rio de Janeiro, Brazil, UA released several videos under its Rule Yourself campaign in February and March 2016. These videos feature Olympic champion swimmer Michael Phelps and Dutch soccer star Memphis Depay.

Currency impact

Adverse forex movements are likely to continue to take a bite out of UA’s top line. However, the impact is likely to be lower than that of its larger rival Nike (NKE), which derives about 55% of its sales from outside North America. Adverse currency movements stemming from a higher US dollar had a negative impact of 5% on Nike’s revenue in fiscal 3Q16. In contrast, Under Armour derived 87% of its revenue from North America in 2015.

VF Corporation’s (VFC) 2015 revenue rose by 1% in reported terms and 6% in currency-neutral terms to $12.4 billion. In 2015, VFC derived about 35% of its revenue from outside the US. However, Adidas (ADDYY) benefited from currency movements last year due to the lower euro, its reporting currency. Reported sales rose by 16% to 16.9 billion euros, while the increase was 10% in currency-neutral terms.

Latest articles

19 Jul

Afya's IPO Sees Strong Listing Gains

WRITTEN BY Mohit Oberoi, CFA

Afya (AFYA) listed on the Nasdaq Global Select Market on July 19. The company priced its IPO at $19 per share.

19 Jul

What to Watch For in Amazon's Q2 Earnings

WRITTEN BY Sanmit Amin

e-Commerce giant Amazon (AMZN) is scheduled to report its second-quarter earnings results after the closing bell on July 25.

19 Jul

Barrick Gold Reaches Deal to Buy Acacia Mining

WRITTEN BY Anuradha Garg

After a long standoff, Barrick Gold (GOLD) and Acacia Mining (ABGLF) have reached an agreement.

19 Jul

Comcast Shares Pop on Goldman's Optimism

WRITTEN BY Ruchi Gupta

Comcast (CMCSA) shares popped after Goldman Sachs issued a positive note on the company recently. Goldman upgraded its rating for Comcast to "buy" from "hold."

19 Jul

Why Analysts Are Bearish on Netflix Stock

WRITTEN BY Aditya Raghunath

Netflix stock fell over 10.0% on Thursday and is down 0.5% today as well.

On Thursday, pet retailer Chewy (CHWY) reported its first-quarter results after the market closed. The company reported its earnings for the first time.