Under Armour, Inc. (NYSE:UA) had strong sales momentum acceleration in the fourth quarter, led by apparel across all categories. Long term, their new category "Charged Cotton" looks like a winner.
FBR says, "Sales momentum accelerated in 4Q with impressive gains in apparel across categories, aided by strong growth in direct to consumer (+56%), which, coupled with a $0.04 tax benefit, drove upside to our estimate...We expect that "Charged Cotton" - a new category for UA, whereby the company brings its focus on performance to cotton - will be a relatively modest contributor to FY11 top-line growth but has the potential to fuel significant growth longer term, with the prospect of appealing to a broad swath of consumers.
"We are adjusting our FY11 EPS estimate to $1.66 (up from $1.55) on sales of $1.35 billion (+27% year over year) and operating margin of 10.9% (+30 bps year over year)...Our 1Q EPS estimate is $0.21, which assumes sales growth of 28% and operating margin of 6.4%. We are introducing our FY12 EPS estimate of $2.07 (+25% year over year)."
FBR Capital reiterates a 'Market Perform' rating on Under Armour, Inc. (UA), which closed Friday at $59.75, dropping $0.04, or 0.07 percent. FBR raised their PT on Under Armor from $50 to $60.
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