Is a Correction Looming Ahead for Under Armour Inc. (UAA)

Sportswear manufacturer Under Armor Inc. (NYSE: UAA) may be on the verge of returning to growth after several quarters of failure. Thus, the chosen strategy seems to be working, allowing the company’s competitive position to improve.

With sales growth of $ 1.3 billion and profits of $ 0.16 per share, Under Armor Inc. (NYSE: UAA) delivered a positive surprise early in May 2021. Even with the brand’s rocky history, this is excellent news. Due to Under Armor’s inability to adapt fully to changing consumer preferences, it lost market share prior to the COVID-19 crisis. Additionally, the brand experienced significant losses in North America, where it traditionally makes up more than half of its sales. As a result, a new development strategy was implemented by Under Armor last year to rebuild sales and make up for lost customers. 

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Among the plan’s key features are a noticeable increase in attractiveness of popular categories (such as running products), the relaunch of a better digital sales channel in North America, demand management, and an overall restructuring plan of approximately $ 550 million. The strategy is working, as indicated by the company’s quarterly report. The company’s North American market grew by 32 %, exceeding Wall Street’s expectations. A 69 % increase in digital sales was also reported by Under Armour last year, on par with its biggest competitors and up from the period of e-commerce boom last year. In addition, gross revenue for the company reached 50 % for the last quarter. According to Under Armor, the previous quarter is just the beginning of growth, so they increased their forecast for 2021.

Under Armor Inc. (NYSE: UAA) closed the last trading day at $21.07, a decline of -1.54%. Volume was 4.19 million shares, less than the average volume of 5.37 million shares traded over the previous three months. During the trading session, the stock oscillated between $20.955 and $21.58. The company had an earnings per share ratio of 0.23. UAA’s stock has lost -4.88% of its value in the last five sessions and moved -8.55% over the past month, but it has gained 22.71% over the past year. There is a significant difference between the 50-day moving average of $22.71 and the 200-day moving average of $18.24 for this stock. Furthermore, the stock is currently trading with an RSI of 39.23.


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