Under Armour beats by $0.13, beats on revs; guides FY18 EPS above consensus, reaffirms revs guidance
- Reports Q3 (Sep) earnings of $0.25 per share, excluding non-recurring items, $0.13 better than the S&P Capital IQ Consensus of $0.12; revenues rose 2.4% year/year to $1.44 bln vs the $1.42 bln S&P Capital IQ Consensus.
- North America revenue decreased 2 percent to $1.1 billion (down 1 percent currency neutral) and the international business increased 15 percent to $351 million (up 17 percent currency neutral), representing 24 percent of total revenue.
- Excluding restructuring efforts in both periods, adjusted gross margin increased 20 basis points to 46.5 percent compared to the prior year driven predominantly by product cost improvements and lower promotional activity offset by channel mix.
- Co issues upside guidance for FY18, sees EPS of $0.19-0.22, excluding non-recurring items, vs. $0.17 S&P Capital IQ Consensus.
- Revenue is expected to increase approximately 3 to 4 percent reflecting a low single-digit decline in North America and international growth of approximately 25 percent. From a product perspective, apparel is expected to grow at a mid-single-digit rate, footwear at a low single-digit rate, and accessories is now expected to decline at a mid-single-digit rate.
- Gross margin is expected be flat to down slightly versus the prior year rate of 45.0 percent. Adjusted gross margin is expected to improve slightly compared to 2017 as benefits from product costs and lower planned promotional activity are offset primarily by inventory management actions.
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