Susquehanna analyst Sam Poser dives into the weak earnings report turned in by Under Armour (UAA, UA) today.
“The Covid-19 crisis has exacerbated the existing problems facing the Under Armour brand. UAA does not have the brand consideration or compelling product assortment necessary to reaccelerate sales post the current crisis,” warns Poser.
“Elevated inventory levels should pressure gross margin for the balance of the year and stymie UAA’s ability to introduce new product. UAA could continue to lose market share to Nike, Adidas, and others who garner greater brand consideration and more financial flexibility,” he adds.
Susquehanna keeps a Negative rating on UAA and slashes its price target to $4 off lowered estimates.
Previously: Under Armour plunges after weak outlook (May 11)