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Earnings Outlook: Under Armour earnings: Is an oversupply of merchandise hurting the brand?

Under Armour Inc. is scheduled to report second-quarter earnings on Wednesday before the opening bell, and analysts will be looking for signs that the athletic company’s oversupply of merchandise isn’t hurting the brand.

“Excess carry-over inventory, fallout from poor product distribution decisions, and developing brand image degradation all point to trouble ahead,” said Susquehanna Financial Group analysts led by Sam Poser. “The company is not fundamentally positioned for the rebound that its current stock implies.

Under Armour UAA, -2.22%UA, -0.84% shares have rallied 35% over the last three months.

This isn’t the first time that the relevance of the Under Armour brand or the company’s inventory levels have caused analyst unease.

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