Evercore ISI analysts reiterated an Underperform rating and a $7 price target on Under Armour (NYSE:UAA), expressing continued concern over Under Armour’s sales for the fourth fiscal quarter.
The analysts pointed out that the broader slowdown in discretionary spending for the first calendar quarter of 2024 has been well recognized, but they harbor specific reservations about Under Armour’s performance. The company has revised its North American revenue outlook downward for three consecutive quarters, and as of the February 8th earnings call, there appeared to be no immediate signs of improvement, with expectations of ongoing volatility.
The analysts suggest that applying either typical seasonal patterns or recent multi-year trends indicates potential shortfalls relative to fourth-quarter consensus sales estimates. Their market checks indicate potential disruptions from the recent bridge collapse near Under Armour’s primary east coast distribution center in Baltimore, which could impact operations. Additionally, with Adidas gaining ground in Europe, the analysts are skeptical that Under Armour’s international sales will pick up enough to significantly counterbalance weaknesses in the US market.