Down 20% This Year, Will Under Armour's Stock Recover Following Q4 Results?

Core Viewpoint - Under Armour is expected to report better-than-consensus fiscal Q4 2024 results, despite facing challenges in the North American retail market, with a projected revenue decline for the full year 2024 [2][4]. Group 1: Financial Performance - Under Armour's fiscal Q4 2024 revenues are estimated to be around $1.4 billion, exceeding consensus estimates, while Q3 revenues fell 6% year-over-year to $1.5 billion [4]. - The company anticipates a revenue decline of 3-4% year-over-year for the full year 2024, with diluted earnings per share expected to be between $0.57 to $0.59 [2][6]. - Gross margins are projected to improve by 120 to 130 basis points from 44.9% in FY'23, but will remain below the 50% level seen in FY'21 [2]. Group 2: Stock Performance - Under Armour's stock has declined 55% from approximately $15 in early January 2021 to around $7 currently, underperforming the S&P 500 over the past three years [3]. - The current valuation of Under Armour is estimated at $8 per share, which is about 20% higher than the current market price [3][6]. Group 3: Market Dynamics - The company is experiencing strong sales growth in regions outside North America, with high single-digit growth rates in Europe, the Middle East, Africa, and Asia Pacific [2]. - Inventory levels decreased by 9% year-over-year to $1.1 billion, while cash and cash equivalents stood at $1 billion at the end of Q3 [4].