What To Expect When Under Armour Reports Q1

After two consecutive billion-dollar quarters, is Under Armour Inc. set to serve up a repeat?

The Baltimore-based footwear-and-apparel maker will announce its first quarter earnings on Thursday, and analysts are betting that the firm will hit the billion-dollar sales mark again — $1.03 billion, to be exact. Earnings per share estimates sit at 2 cents per share and market watchers are generally bullish on the brand, which implemented a two-for-one stock split on April 8.

We are positive on Under Armour heading into its 1Q16 and are raising our post-split EPS estimate to 3 cents from 2 cents with potential for further EPS upside,” Canaccord Genuity Inc. analyst Camilo Lyon wrote Monday. “We believe Q1 sales growth topped our 27 percent estimate driven by footwear (both by solid gains in basketball and planned footwear liquidations) as well as new product introductions.”

Favorable comparisons against 1Q15 when revenues and EPS were impacted by the West Coast ports slowdown and a brutal winter also bode well for Under Armour, Lyon pointed out.

Sterne Agee CRT analyst Sam Poser is also upbeat on the brand ahead of Thursday’s release, continuing to dub it his “number one pick for long-term growth investors.” The analyst expects sales of $1.03 billion, in line with consensus estimates.

The power of the brand continues to resonate,” Poser wrote. “Growth continues to be broad-based across categories and geographies.”

There is also room for the brand to grow in North America which “has not matured as Under Amour is only selling in 11,000 points of distribution in the U.S. versus Nike at 24,000,” Poser said.

International growth will accelerate this year due to the Olympics and other initiatives,” he added. “Under Armour is positioned to achieve the three-year revenue [compound annual growth rate] of at least 25 percent through 2018.”

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