No one expected anything out of this company. Better than expected margins were the driver here, down 70bps, which was better than the 100bps estimate that the Wall Street gurus has expected. Revenues are plodding along and revenues fucking soared in Asia. But the bottom line is, this stock is so fucking hated right now, with the shares in the dumpster, it was ripe for a reversion to the mean.
The fact that margins came in a little better than expected tells you that pricing power is improving and the business is starting to recover.
Reports Q1 (Mar) loss of $0.01 per share, $0.03 better than the Capital IQ Consensus of ($0.04); revenues rose 6.7% year/year to $1.12 bln vs the $1.11 bln Capital IQ Consensus. North American revenue declined 1 percent as new distribution was more than offset by the absence of business lost to bankruptcies in 2016. International revenue, which is comprised of our EMEA, Asia-Pacific, and Latin America regions, represented 20 percent of total revenue in the quarter, and was up 52 percent (up 57 percent currency neutral). By region, revenue was up 55 percent in EMEA, 60 percent in Asia-Pacific and 30 percent in Latin America. Apparel revenue increased 7 percent to $715 million including strength in training, golf, and team sports. Footwear revenue grew 2 percent to $270 million, against last year’s same period which was up 64 percent due to significant strength in basketball sales and the timing of liquidations. Accessories revenue increased 12 percent to $89 million with strength in men’s training, running, youth, and global football.
Gross margin was down 70 basis points (vs. 100 bps guidance) to 45.2 percent as benefits from channel and product mix were offset by continued efforts to manage inventories appropriate to market demand.
Co reaffirms guidance for FY17, sees FY17 revs +11-12% to nearly $5.4 bln vs. $5.35 bln Capital IQ Consensus. Gross margin expected to be slightly down compared to 46.4% in 2016 with benefits in product costs being offset by changes in foreign currency and shifts in overall sales mix, as the footwear and international businesses continue to outpace the growth of the higher margin apparel and North American businesses; Operating income expected to reach ~$320 million.
Shares of $UAA are down 32% for 2017 — but indicating higher by more than 10% this morning.
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Does anybody still wear anything UA makes? I gave a bag of UA away last year. High school kids wont wear it anymore. Perhaps some middle aged farts…?