After a rough 2017 marked by slowing sales and execution missteps, Under Armour (UAA) looks to have scored an early win in 2018.
"We checked out the new HOVR running line from Under Armour [this weekend], and believe initial reads are strong," said Jefferies analyst Randy Konik in a note Sunday. "We see this innovative [sneaker] platform as a potential catalyst to reignite growth in the footwear category."
Konik, who conceded to buying a pair of Under Armour's new sneakers after liking their comfort and feel, believes initial consumer response has been strong. "We noted heavy conversion around both shoes, sales associate commentary was positive, and the Phantom was already out of stock in many sizes/colors online, a good sign given the $130-$140 ticket vs. most of the running line at $70-$90," Konik added.
The long-time retail analyst recommends buying Under Armour's stock amid early signs of improving fundamentals and low Wall Street expectations. Under Armour's stock has plunged about 33% over the last year, with 9% coming in the past month alone.
The HOVR Sonic ($100) and the HOVR Phantom ($130) launched this week, boasting a proprietary foam compound that promises a combination of soft cushioning and shock absorption. For an extra $10, both styles could be equipped with an activity tracker that links with Under Armour's MapMyRun app. The sneaker line takes aim at Adidas' (ADDYY) popular Boost franchise and Nike's (NKE) new Epic Flyknit React, which features special foam technology as well.
TheStreet got up close and personal with HOVR at a launch party two weeks ago.