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What to Expect from Under Armour’s 2019 Revenue Growth

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Jan. 11 2019, Published 4:40 p.m. ET

Future expectations

For the fourth quarter of 2018, Wall Street analysts expect Under Armour’s (UAA) revenue to rise 1.0% year-over-year or YoY to $1.38 billion. For 2018, analysts forecast revenue growth of 4.1% YoY to $5.18 billion. However, for 2019, analysts expect revenue to increase 4.1% to $5.39 billion.

Amid North American troubles, the company’s top-line growth is expected to find a cushion in international, direct-to-consumer, and wholesale operations growth.

For 2018 and 2019, Under Armour management expects revenue to increase 3%–4%. It has projected revenue to return to a low-double-digit growth rate by 2023.

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North America to remain under pressure

The North America segment, which is the largest contributor to total revenue for Under Armour, has been in trouble for some time. In the third quarter of 2018, revenue declined 2%.

For 2018, the North American market is projected to face a low-single-digit decline. For 2019, revenue from North America is forecast to remain the same on a YoY basis.

At an investor meeting in December, Under Armour projected its five-year (2018–2023) revenue CAGR for North America at 1%–3%. In contrast, for international operations, the five-year revenue CAGR is projected at 17%–19%.

By 2023, though North America’s share would fall to 56% from 73% at present, it would remain the biggest contributor to revenue.

Under Armour expects full-price sales to improve its performance in the region. It has also undertaken extensive inventory management initiatives for North America.

Expectations for peers

For fiscal 2019 (ending in May), analysts forecast Nike’s (NKE) revenue to grow 7.8% to $39.23 billion. For Skechers’ (SKX) 2018, analysts project sales growth of 12.0% YoY to $4.66 billion.

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