Under Armour tumbles after probe, results

Nov. 04, 2019 7:19 AM ETUnder Armour, Inc. (UAA)UAA, UABy: Niloofer Shaikh, SA News Editor34 Comments
  • Under Armour (NYSE:UAA) reports revenue were flat on a constant currency basis in Q3.
  • Wholesale revenue down 2% to $892M and direct-to-consumer revenue -1% to $463M.
  • North America revenue slipped 4% to $1B while International revenue grew 5% to $368M.
  • Apparel revenue up 1% to $986M; Footwear revenue fell 12% to $251M; Accessories revenue +2% to $118M.
  • Gross margin rate improved 220 bps to 48.3%, driven by channel mix, supply chain initiatives and restructuring charges in the prior period.
  • SG&A expense rate grew 190 bps to 38.5%.
  • Inventory declined 23% to $907M.
  • Total debt dropped 26% to $592M.
  • FY2019 Guidance: Revenue: +2% vs. prior outlook of ~+3% to +4%; Gross margin rate: ~+130 bps to +150 bps; Adjusted gross margin rate: ~+90 bps to +110bps; Operating income: High end of $230M to $235M; Interest and other expense net: ~$30M; Effective tax rate: ~22%; Diluted EPS: High end of $0.33 to $0.34; Capex: ~$180M.
  • Moving the stock though is news of dual probes by the DOJ and SEC in regards to the company's accounting practices. The leak of the probes comes just days after CEO Kevin Plank announced his departure from an operating role at the company.
  • UAA -12.87% and UA -11.95% premarket.
  • Previously: Under Armour EPS beats by $0.04, beats on revenue (Nov. 4)

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