Under Armour Q3 Sales Remain Challenged, No Sight Of 'Positive Inflection': Analyst

Shares of Under Armour Inc UAA remained under pressure in early trading on Friday, despite the company reporting upbeat quarterly earnings.

Here are some key analyst takeaways from the earnings:

• JPMorgan analyst Matthew Boss reiterated an Underweight rating, while cutting the price target from $8 to $7.
• Telsey analyst Cristina Fernández maintained a Hold rating and price target of $10.
• Needham analyst Tom Nikic reaffirmed a Hold rating on the stock.

Check out other analyst stock ratings.

JPMorgan: Under Armour reported adjusted earnings of 8 cents per share for the fiscal third quarter. It beat Street expectations of 4 cents per share, Boss said in a note. The company's revenue decline of 5.7% year-on-year was better than the projection of 9.8%, he added.

Under Armour's gross margin outperformance was driven mainly by "more favorable supply chain benefits on product cost savings & lower freight costs, followed by unplanned FX benefits, and lower-than-planned sales to the off-price channel," the analyst wrote.

Although management raised their fiscal 2025 guidance for adjusted earnings 28-30 cents per share, from their prior projection of 24-27 cents per share, the guidance for the fiscal fourth quarter implies an adjusted loss of 9-11 cents per share, below consensus of a loss of 6 cents per share, he further stated.

Telsey Advisory Group: Improved profitability is driving increases in Under Armour's earnings guidance, Fernández said. She added, however, that revenues are expected to remain under pressure in the fiscal fourth quarter, with stronger headwinds than witnessed in the third quarter.

Under Armour expects fourth-quarter sales and earnings to be impacted by "softness in the spring-summer 2025 order book, ongoing weakness in the APAC business, a challenging North American Factory House store comp due to lapping high promotions last year, marketing investments, and FX headwinds," the analyst stated. "We do not yet have line of sight as to when they can inflect positively given the company’s commentary that there is more work to do in North America and APAC in FY26," she further wrote.

Needham: Under Armour's gross margins expanded 240 basis points (bps) year-on-year in the latest quarter. It beat the high end of guidance by 65bps, Nikic said. North America revenues declined by 8%, better than the consensus of 13%, he added.

The company's international performance was a "mixed bag.” EMEA (Europe, Middle East, and Africa) returned to growth, while Asia remained challenged, the analyst said. "We're in wait-and-see mode regarding demand trends amid a highly-competitive global sportswear industry," he further wrote.

Price Action: Shares of Under Armour had declined by 2.63% to $7.41 at the time of publication on Friday.

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