Under Armour Stock Down 24% This Year, What’s Next?

[Note: Under Armour’s
UAA
FY’23 ended March 31, 2023]

Under Armour (NYSE: UA), a sports equipment company that manufactures footwear, sports, and casual apparel, has declined by 24% year-to-date and currently stands at around $7. The company’s stock traded lower as the company’s growth slowed down due to a heavily promotional market in the North American retail segment. Under Armour reported a small profit in the first quarter (ended June) with gross margins still under pressure. The biggest issue remains the high inventory levels in the apparel retail sector. Under Armour ended the quarter with inventory at $1.3 billion, up 38% from prior year levels in Q1, though in line with expectations due to leaner inventories in 2022. Under Armour’s gross margins were around 50% after the Covid hit, but inventory pressures in the industry have driven margins down to 46.1% for the most recent quarter.