Under Armour Shares Fall Despite Topping Earnings and Sales Expectations

Wall Street was running away from shares of Under Armour Inc. (UAA)   on Tuesday, May 1.

The stock fell 6.3% after initially rising following the release of first-quarter earnings during the premarket session.

The athletic apparel company posted break-even first-quarter adjusted earnings and revenue of $1.19 billion that topped analysts' forecasts, which called for a loss of 5 cents and revenue of $1.12 billion. The net loss in the period was 7 cents a share, wider than the year-earlier loss of 1 cent. The company recorded restructuring charges in the latest quarter of $37.5 million.

Under Armour said apparel sales in the quarter rose 7% on strength in men's training, while footwear sales rose 1%.

Cannacord Genuity analyst Camilo Lyon showed lack of faith in the company's turnaround efforts ahead of the earnings in a note on Monday, April 30.

"We see no reason to be constructive on UAA as the product creation/segmentation malaise has not improved, personnel issues/discord continue to surface, the competition landscape is intensifying, and valuation appears indefensible," he wrote. Cannacord reiterated its sell rating and gave the company a $9 price target. 

 

More from Investing

Applied Materials Keeps Rising on Wednesday

Applied Materials Keeps Rising on Wednesday

Chart: Buybacks in Semiconductor Stocks Help Sector Weather the Storm

Chart: Buybacks in Semiconductor Stocks Help Sector Weather the Storm

The Fed Really Likes That Its Gradual Approach to Rate Hikes Is Working

The Fed Really Likes That Its Gradual Approach to Rate Hikes Is Working

Buy Netflix Even After Its Big Run-Up? Here's Why It's Not Such a Crazy Idea

Buy Netflix Even After Its Big Run-Up? Here's Why It's Not Such a Crazy Idea

It's Not a Big Surprise That Market Players Had Limited Conviction Wednesday

It's Not a Big Surprise That Market Players Had Limited Conviction Wednesday