Sportswear and casual apparel retailer Under Armour (NYSE: UA) is set to announce earnings for the final quarter of 2014 on Wednesday, February 4th after market close. The company is expected to post earnings of $0.39 a share, up from $0.29 the same quarter a year prior. The retailer is also expected to post $849.46 million in revenue, marking a 24.4% increase on a year-over-year basis. Revenue for the full year of 2014 is expected to come in at $3.039 billion, ahead of the company’s own guided revenue of $3.03 billion.
The athletic retailer has consistently beaten analysts’ estimates, posting at least double-digit profit increases in all but one of the six past quarters and has recorded 15 consecutive quarters of double-digit sales gains. Most recently, Under Armour has been reaping the benefits of the “athleisure” trend that has been rapidly gaining popularity.
Under Armour has continuously sustained focus on brand development, direct-to-consumer business expansion, product innovation and took a chance in the technology-based fitness business that many believe will benefit the company’s Q4 results.
Canaccord Genuity analyst Camilo Lyon weighed in on Under Armour on February 3rd, ahead of the company’s earnings. Lyon maintained a Buy rating on the stock with a price target of $93, marking a potential upside of 29%. The analyst noted, “Discussions with our industry contacts coupled with our store checks suggest UA had a solid holiday with strong sell-throughs early in the season at full price. Not only did UA’s CGI program expand in volume, we believe it also significantly outperformed the overall business, boding well for overall apparel sales.” He concluded, “From our perspective, UA is on its way to becoming the #2 global athletic brand with an opportunity to reach $10B in sales by 2019, driven by international expansion, DTC and Footwear.”
Camilo Lyon has rated Under Armour 11 times since July 2011, earning a 100% success rate recommending the company and a +69.8% average return per recommendation. Overall, Lyon has a 53% success rate recommending stocks and a +6.5% average return per recommendation.
Separately, Andrew Burns of D.A. Davidson maintained a Neutral rating for Under Armour with a $73 price target on January 29th, arguing that despite a reasonable outlook for revenue growth, its stock has “insufficient upside” potential.
Andrew Burns currently has an overalls success rate of 51% recommending stocks and a +0.3% average return per recommendation.