Under Armour Inc (NYSE:UA) Positive Sentiments Remain High Ahead Of Q2 Earnings


Dallas, Texas 07/20/2015 (Financialstrend) – Under Armour Inc (NYSE:UA) stock is up by more than 31% this year having clocked its all-time highs of $89.35 a share. There are a number of catalysts that the Street continues to watch out for as the company continues to affirm its position as the second largest player in the US active wear market. The company expects $3.78 billion in revenue this year representing a 23% increase from 2014 levels.

 Key Catalysts

A drop in cotton and energy prices is expected to drive Under Armour Inc (NYSE:UA)’s profitability at the back of reduced input costs. There has also been talk that the company is looking to open fewer Under Armour Factory houses, which should benefit the company’s overall profit margins at the back of the launch of the Armour concept.

Increased promotional activity should come into play expected to accelerate the sale of the older inventory, paving the way for new products to hit the market.  The West Coast port standoff having been resolved should allow the company to move more inventory having been a point of concern in the past few months.

 Possible Concerns

Cost headwinds should provide the biggest headwinds in Under Armour Inc (NYSE:UA) push to meet its full-year earnings estimates. Higher sales won’t translate to more profits as the company is expected to feel the effects of a strengthened dollar especially on sales outside the US.

Higher Selling General and administrative expenses should be a point of concern as they could end up hurting the company’s overall profit margins. The Street will also wait to see the impact of new store roll out as well as higher marketing costs, which could end up affecting Under Armour Inc (NYSE:UA)’s bottom line.  The company opened a total of 23 new stores in the first quarter with plans to open more over the course of the year which could weigh in on earnings.

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