Under Armour Suiting Up For Earnings (UA, NKE)

On Tuesday morning (Oct. 30), we’ll get the awaited earnings report from Under Armour (NYSE:UA).  Q3 is expected to see $0.34 EPS on $190.95 million revenues according to First Call’s consensus estimates; and next quarter is also expected to see $0.34 EPS but on revenues of $179.3 million.  If the company offers 2008 guidance, consensus appears to be $1.31 EPS on $$788.5 million in revenues (with a wide range on both EPS & Revenues).  The WSJ has recently noted competition heating up with Nike (NKE)

The key metric question may boil down to its stance on what it sees for 2008.  It is obvious that warm weather from September through October, and this would logically create some concerns for the company’s fourth quarter.  That is our take, and it hasn’t been readily addressed by Wall Street besides a UBS downgrade in September over weather playing a part (which was discussed less negatively last week upon valuation).

Late options trading on Monday appears to have traders braced for a move of up to roughly $5.00 in either direction.  The average analyst price target is between $65 and $66, depending on your source.  Its chart had been weak up until the last few days, but this can be quite volatile around news events and subject to large price swings.

In late day trading, Under Armour shares were down over 2% at $58.11, and the 52-week trading range is $41.37 to $73.40.  Under Armour’s market cap is currently about $2.8 Billion.

Jon C. Ogg
October 31, 2007