Can Under Armour Return To The Glory Days??? – Part 2

I wrote about Under Armour three months ago,

Can Under Armour Return To The Glory Days???

Under Armour (NYSE: UAA) used to be the IT company on Wall Street with years of sales growth great than 20%, but things went left in 2017 when sales started slowing down. The end result was company struggled to manage inventory and saw margins decline when it had to sell surplus product at heavy discounts.

That’s when Under Armour put together turn around strategy which focused on inventory control and implementing a whole new strategy for product development.

Price is clearly in an uptrend based on price making higher lows. However, based on the immediate levels in play, the weekly zones, the turnaround story might be short lived.

Under Armour reported second-quarter results on Tuesday that didn’t quite meet Wall Street expectations.  Although they the company maintained their forecast for the full year and international sales grew in the low double digits, revenue in North America grew only 1.5%.  Needless to say the stock price sold off on the news, just $0.44 away from the bottom of the weekly supply at $26.

The company attributed the lackluster results were due to softer-than-expected demand in its direct-to-consumer channel, meaning lower traffic in physical stores and lower conversion rates online. Since price is in the middle of both weekly zones, the one of the better plays right now would be to put on a iron condor, if you can get the right amount of premium. However, because of the volatility collapse after earnings, you may have to go out at least three months to find the right amount of premium.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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