UAA - Under Armour Is Lagging Behind Peers Like Nike & Lululemon! Analyst Explains Why | Benzinga
Under Armour, Inc. (NYSE:UAA) shares are trading mildly higher on Friday.
Yesterday, the company reported a fourth-quarter revenue decline of 4.9% year-on-year to $1.33 billion. Shares started plunging after the company declared gloomy guidance.
JP Morgan analyst Matthew R. Boss downgraded the stock to Underweight from Neutral, lowering the forecast to $6 from $8.
The analyst highlights CEO Plank’s comments that indicate a “reset” in the North American business into FY25, including an anticipated revenue decline of -15% to -17% year over year, particularly in the direct-to-consumer e-commerce channel to improve quality of sales.
As a result, FY25 operating income is anticipated to decline by 55% year over year.
According to the analyst, Under Armour is lagging behind peers in terms of the following:
- Product innovation & newness (with lead times of up to 18 months to drive critical mass in launch product).
- Profitability with Under Armour’s margin profile is now more than 1,000bps below global sportswear peers.
- DTC infrastructure with mgmt is taking action ...