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Under Armour Announces the Launch of New Shoes

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Price movement

Under Armour (UAA) has a market cap of $13.0 billion. It fell 1.9% to close at $31.67 per share on December 14, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -1.9%, 1.6%, and -21.4%, respectively, on the same day.

UA is now trading 0.90% above its 20-day moving average, 5.2% below its 50-day moving average, and 18.0% below its 200-day moving average.

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Related ETF and peers

The Schwab US Broad Market ETF (SCHB) invests 0.05% of its holdings in Under Armour. The YTD price movement of SCHB was 12.6% on December 14.

The market caps of Under Armour’s competitors are as follows:

  • Nike (NKE): $86.0 billion
  • Skechers USA (SKX): $4.2 billion
  • Columbia Sportswear (COLM): $4.2 billion

Latest news on Under Armour

In a press release on December 14, 2016, Under Armour reported, “Today, Under Armour (UA, UAA) announces the brand’s newest UA Record Equipped running shoes— UA SpeedForm Gemini 3 RE, UA SpeedForm Velociti RE, and UA SpeedForm Europa RE—designed to provide runners with the digital tools needed to understand recovery and ultimately maximize performance.”

The report also stated: “The new shoes are powered exclusively by MapMyRun, Under Armour’s mobile app and global digital running community. Each shoe includes new features that will arm runners not only with automatic tracking capabilities but also with insights into their muscular fatigue prior to working out.”

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Performance of Under Armour in 3Q16

Under Armour reported 3Q16 net revenues of $1.5 billion, a YoY (year-over-year) rise of 22.2%, as compared to $1.2 billion in 3Q15. The company’s gross profit margin and operating margin fell 130 basis points and 70 basis points, respectively, in 3Q16 YoY.

The gross profit margin fell due to the impact of an unfavorable foreign exchange, an increase in promotions, and the timing of liquidation, partially offset by the margin improvement in product costs.

Its net income, EPS (earnings per share) of Class A and Class B, and EPS of Class C common stock rose to $128.2 million, $0.29, and $0.29, respectively, in 3Q16. Those figures compare to $100.5 million, $0.23, and $0.23, respectively, in 3Q15.

Under Armour’s cash and cash equivalents and inventories rose 12.9% and 11.9%, respectively, in 3Q16 YoY.

Projections

Under Armour made the following projections for fiscal 2016:

  • net revenues: ~$4.9 billion
  • operating income: $440 million–$445 million
  • interest expense: ~$30 million

Next, we’ll take a look at Ralph Lauren (RL).

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