Under Armour (UAA), a manufacturer of athletic apparel, footwear, and accessories, delivered blowout second-quarter results driven by continued momentum for all products. Shares jumped 7.5% on the news, closing at $22.70 on August 3.
The company reported adjusted earnings of $0.24 per share in Q2, significantly outpacing analysts’ estimates of $0.05 per share. (See Under Armour stock charts on TipRanks)
In addition, revenue climbed 91% year-over-year to $1.35 billion, and surpassed the Street’s estimate of $1.21 billion. Compared to the prior-year quarter, the company’s Apparel, Footwear, and Accessories revenue grew 105%, 85%, and 99%, respectively.
Commenting on the results, Patrik Frisk, the company’s President and CEO said, “With the critical mass of our transformation behind us and the continued improvements across product, marketing, and our financial results, I believe this year sets a robust foundation that positions us well for our next chapter of profitable growth.”
“Given the continued momentum, we’re raising our full-year outlook, which puts us on track to achieving a solid performance in 2021,” Frisk added.
For full year 2021, the company now projects revenue growth to be in the low twenty percent range, and adjusted earnings to be in the range of $0.50-$0.52 per share. The consensus estimate for earnings is pegged at $0.34 per share.
For the third quarter, Under Armour forecasts adjusted earnings to land in the range of $0.13-$0.15 per share.
In response to the Q2 results, Pivotal Research analyst Mitch Kummetz reiterated a Buy rating on the stock with a price target of $34, implying 49.8% upside potential to current levels.
Kummetz believes that despite the robust growth witnessed in the first half of the year, the company is being very conservative in its outlook for the rest of 2021.
Consequently, the analyst said, “UAA’s strong first-half results reflect momentum in its business, aided by favorable macro and industry dynamics. That said, for the back half, UAA is being cautious on the macro and supply chain, as well as some company-specific items.”
Overall, the stock has a Moderate Buy consensus rating based on 8 Buys and 6 Holds. The average Under Armour price target of $29.08 implies 28.1% upside potential to current levels. Shares have gained 128.6% over the past year.
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