Under Armour Q2 Earnings Preview: Revenue Expected to Decline 4.2% YoY

Under Armour is set to announce Q2 earnings this Friday. Analysts expect a 4.2% YoY decline in revenue to $1.13 billion and adjusted EPS of $0.03. The company has beaten revenue expectations by 1.3% in the previous quarter and exceeded analysts' EPS guidance. However, it has missed Wall Street's revenue estimates three times over the last two years.

Under Armour (UAA) is set to announce its second-quarter (Q2) earnings results this Friday. Analysts are projecting a 4.2% year-over-year (YoY) decline in revenue to $1.13 billion, with adjusted earnings per share (EPS) expected to be $0.03 [1]. The company has a history of beating revenue expectations, having exceeded estimates by 1.3% in the previous quarter, while also exceeding analysts' EPS guidance [2].

However, Under Armour has a track record of missing Wall Street's revenue estimates, having done so three times over the past two years [2]. This history of underperformance and the expected decline in revenue have led to a Zacks Rank of #4 (Sell) for the stock, suggesting it may underperform the overall market in the near future [1].

Looking at the company's revenue breakdown, analysts expect 'Net revenues by product- Apparel' to decline by 3.6%, 'Net revenues by product- Footwear' by 7.7%, and 'Net revenues by product- Net Sales' by 6% [1]. 'Net revenues by distribution channel- Wholesale' is expected to decrease by 2.5%, while 'Net revenues by distribution channel- Direct to Consumer' is projected to fall by 6.9% [1]. In terms of geographic revenue, 'Net revenues- North America' is expected to decline by 4.4%, 'Net revenues- Asia-Pacific' by 15.5%, and 'Net revenues- EMEA' by 7.7% [1].

Under Armour's peers in the apparel and accessories segment have shown mixed results. Levi's reported year-on-year revenue growth of 6.4%, while ThredUp saw revenues up 16.4% [2]. Investors in this segment have had steady hands going into earnings, with share prices up 1.1% on average over the last month, while Under Armour is down 3.7% during the same time [2].

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References:
[1] https://finance.yahoo.com/news/stay-ahead-game-under-armour-131505640.html
[2] https://uk.finance.yahoo.com/news/under-armour-uaa-reports-earnings-030215726.html