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Under Armour Is Lagging Behind Peers Like Nike & Lululemon! Analyst Explains Why

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Under Armour, Inc. (NYSE:UAA) shares are trading mildly higher on Friday.

Yesterday, the company reported a fourth-quarter revenue decline of 4.9% year-on-year to $1.33 billion. Shares started plunging after the company declared gloomy guidance. 

JP Morgan analyst Matthew R. Boss downgraded the stock to Underweight from Neutral, lowering the forecast to $6 from $8.

The analyst highlights CEO Plank’s comments that indicate a “reset” in the North American business into FY25, including an anticipated revenue decline of -15% to -17% year over year, particularly in the direct-to-consumer e-commerce channel to improve quality of sales.

As a result, FY25 operating income is anticipated to decline by 55% year over year.

According to the analyst, Under Armour is lagging behind peers in terms of the following:

  1. Product innovation & newness (with lead times of up to 18 months to drive critical mass in launch product).
  2. Profitability with Under Armour’s margin profile is now more than 1,000bps below global sportswear peers.
  3. DTC infrastructure with mgmt is taking action …

Full story available on Benzinga.com

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