Athleisure fashion company Under Armour (UAA) has not exactly been a bed of roses the last few months. Some days have been great, others less so. But today was a clear win. Under Armour shares were up over 30% due in large part to a turnaround plan that seems to be working.
Media reports indicate that Under Armour’s sales and earnings beat analyst forecasts. Earnings came in at $0.30 per share, which beat estimates of $0.19 per share, and revenue totaled $1.4 billion, which beat the $1.38 billion estimated of analysts. A large reason for the strong results was extensive cost-cutting measures. The company shutdown a distribution center in California.
Change to Come
Under Armour’s cost-cutting moves are expected to be the start of much better times to come. A leaner operation would tend to do better in times of economic uncertainty. With what some are calling a “vibecession” already in progress, where it feels like a recession but technically is not one.
Under Armour is also helping to bolster its position with some timely sales. The company is taking up to 50% off certain clothing items, and an extra 40% off the total purchase using a premium code, EXTRA40. One such purchase, the Twister Jacket, was marked down to $25 from an original price of $55, which should catch some attention.
Is Under Armour A Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on UAA stock based on five Buys , nine Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 55.19% rally in its share price over the past year, the average UAA price target of $7.89 per share implies 32.33% downside risk.
