By Senad Karaahmetovic
Shares of Under Armour (NYSE:UA) (NYSE:UAA) are trading about 1% lower in pre-open Wednesday despite the company posting better-than-expected FQ3 results and raising its full-year profit forecast.
Under Armour reported an adjusted EPS of $0.16 on revenue of $1.58 billion, beating the consensus for earnings of $0.09 on sales of $1.55B. Inventory was reported at $1.22B, somewhere in line with the estimates of $1.22B.
Shares initially rose about 6% before erasing all gains to trade in the red minutes before the market opens on Wednesday.
The company raised its full-year EPS guidance to a range of $0.52-0.56 up from the prior $0.44-0.48 and above the consensus of $0.46. The guidance for adjusted operating income of $300 million (up or down $10M) is unchanged.
“2023 revenue growth view is unchanged from the previous expectation of a low single-digit percentage rate increase on a reported basis, up at a mid-single-digit percentage rate on a currency-neutral basis,” UAA added in a statement.
Telsey Advisory Group analysts said the results were “mixed.”
“Revenue growth and SG&A expenses were better, highlighting good cost control, but the gross margin missed the guidance and inventory ended the quarter up 50%, a bit higher than the company's expectation of up 40s — indicating there is more work to do to realign inventories to demand.”
Stifel analysts added:
“We are pleased with the earnings trajectory but discouraged to see the inventory build. With a strong balance sheet, improving earnings and new leadership, we expect investor focus shifts to growth and structural margin opportunities. Consensus estimates will move higher, and we expect continued earnings progress in FY24.”