Why Investors Don’t Care About Under Armour’s Q1 Loss

By Chris Lange Updated Jan 12, 12:35PM EST · Published Apr 27, 8:45AM EDT

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Why Investors Don’t Care About Under Armour’s Q1 Loss — © Thinkstock

[cnxvideo id=”550173″ placement=”ros”]Under Armour Inc. (NYSE: UAA) reported its first-quarter financial results before the markets opened on Thursday. Although the company posted its first loss since going public, it was barely a loss, and it seems that investors were more thrilled about the top-line growth that they missed last quarter.

The apparel giant said that it had a net loss of $0.01 per share and $1.1 billion in revenue, versus consensus estimates from Thomson Reuters that called for a net loss of $0.04 per share and revenue of $1.11 billion. The same period of last year reportedly had earnings per share (EPS) of $0.04 and $1.05 billion in revenue.

North American revenue dropped 1% as new distribution was more than offset by the absence of business lost to bankruptcies in 2016. International revenue, represented 20% of total revenue in the quarter and was up 52% (up 57% currency neutral).

The company reported its segment revenues for the quarter as follows:

Apparel revenues increased 7.3% from last year to $715.4 million.
Footwear revenue grew 2.0% year over year to $269.7 million.
Accessories revenue jumped 11.8% to $89.1 million.

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In terms of outlook for the 2017 fiscal year, the company expects net revenues to grow 11% to 12%, as well as up to 12% to 13% on a currency-neutral basis. Under Armour also expects operating income to reach $320 million in this time.

The consensus estimates for the full year are $0.42 in EPS and $5.36 billion in revenue.

On the books, Under Armour cash and cash equivalents totaled $172.13 million at the end of the quarter, up from $157.0 million in the same period from last year.

Kevin Plank, Under Armour’s board chair and chief executive, commented:

Our first quarter results were in line with our expectations and we’re off to a solid start in 2017. By proactively managing our growth to deliver superior innovative product, continuing to strengthen our connection with consumers and increasing our focus on operational excellence – we have great confidence in our ability to drive toward our full year targets.

Shares of Under Armour closed up 0.9% at $19.71 on Wednesday, with a consensus analyst price target of $22.35 and a 52-week trading range of $18.40 to $45.99. Following the release of the earnings report, the stock was up nearly 10% at $21.58 in early trading indications Thursday.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.