Fubotv earnings beat by $0.10, revenue topped estimates
On Tuesday, JPMorgan analyst Matthew Boss revised the price target for Under Armour Inc. (NYSE:UAA) shares, reducing it to $6.00 from the previous $7.00, while maintaining an Underweight rating on the company. The stock, currently trading at $6.16, has shown significant volatility with a 9% gain over the past week despite a concerning 37% decline over the last six months. According to InvestingPro analysis, Under Armour (NYSE:UA) appears undervalued based on its Fair Value calculation. Boss’s report followed Under Armour’s announcement of a fourth-quarter adjusted earnings per share (EPS) loss of $0.08, aligning with Wall Street’s expectations. The company’s revenues declined by 11.4%, which was slightly better than the anticipated 12.7% decrease. Despite this, Under Armour saw a gross margin expansion of 165 basis points year-over-year to 46.7%, surpassing the Street’s forecast of 46.0%.
Under Armour’s adjusted operating margins, however, were below expectations at -3.0%, compared to the Street’s prediction of -2.9%. This was attributed to an adjusted selling, general, and administrative (SG&A) dollar growth of 7.5% year-over-year, or 870 basis points of SG&A rate deleverage. A closer look at the constant-currency revenue figures for the quarter revealed a 9.8% decline, with North American revenues dropping by 10.1%, which was better than the Street’s -14% projection. International revenues decreased by 10.0% on a constant-currency basis, including a 25.6% reduction in the Asia-Pacific region, while Europe, the Middle East, and Africa (EMEA) slightly increased by 0.2%, and Latin America (LATAM) grew by 2.7%.
Under Armour’s management provided financial guidance only for the first quarter of 2026, citing the unpredictable trade policies and macroeconomic environment, including potential effects from tariffs on demand and costs. They forecast an adjusted EPS of $0.01-$0.03 for the first quarter, which is above the Street’s expectation of $0.00. The company anticipates revenues to decline by 4-5% year-over-year, which is below the Street’s estimate of a 2.1% decrease. This includes a 4-5% fall in North America, surpassing the Street’s -2.6% prediction, high single-digit percentage growth in EMEA, which is above the Street’s forecast of a 4.9% increase, and a mid-teens decline in the Asia-Pacific region, which is worse than the Street’s -3.4% estimate.
The anticipated gross margin expansion of 40-60 basis points year-over-year is driven by a favorable product mix, lower product and freight costs, and foreign exchange tailwinds, which is in line with the Street’s expectation of a 40 basis point increase. InvestingPro analysis shows the company maintaining a robust gross profit margin of 47.5%, while analysts project a return to profitability this year with an EPS forecast of $0.74. Discover more exclusive insights and 6 additional ProTips by accessing the full InvestingPro platform. The adjusted SG&A rate is expected to show slight leverage year-over-year, as opposed to the Street’s model of 80 basis points of deleverage. This is projected to result in adjusted earnings before interest and taxes (EBIT) of $20-30 million, implying an operating margin rate of 1.8-2.6%, which is above the Street’s 0.3% projection.
In other recent news, Under Armour Inc reported its fourth-quarter fiscal year 2025 results, which aligned with expectations for earnings per share (EPS) at -$0.08. Revenue surpassed estimates, reaching $1,181 million, though it marked an 11.4% year-over-year decline. The company’s gross margin improved by 170 basis points to 46.7%, exceeding both Stifel and Street expectations. Looking ahead, Under Armour provided guidance for the first quarter of fiscal year 2026, predicting adjusted EPS between $0.01 and $0.03, against a consensus of $0.00, with an anticipated revenue decline of 4% to 5% due to tariff impacts.
Analysts from Stifel expressed cautious optimism, noting that North American growth could aid in a return to overall growth. Truist Securities maintained a Hold rating with a $9 target, citing the need for fundamental business improvements for stock appreciation. Raymond (NSE:RYMD) James reaffirmed a Market Perform rating, acknowledging the company’s efforts to enhance profitability amid revenue contraction. Citi analysts also maintained a Neutral rating with a $6 target, highlighting challenges in brand positioning and pricing power. These developments reflect Under Armour’s ongoing transition and focus on margin and cost control amidst macroeconomic uncertainties.
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