Filed under: NIKE, Inc’B’ (NKE), Under Armour’A’ (UA)

Under Armour (NYSE: UA) is seeing shares trade down after earnings this morning. It wasn’t the actual EPS number, but the revenues.

The sportswear maker posted EPS of $0.40 and revenues of $186.9 million; First Call estimates were $0.34 EPS on $190.95 million revenues. Under Armour now expects revenue between $590 million and $600 million for 2007, compared with an earlier expectation for between $580 million and $590 million and consensus is already $596 million.

Gross margin for the third quarter of 2007 remained steady at 50.6% compared to 50.6% in the prior year. Another set of issues here were a doubling of inventories to $151.8 million with a simultaneous marketing boost to 12 to 13 percent instead of a prior 10 to 12 percent of revenue forecast. Higher marketing costs may pay off, but the higher inventories are rarely a welcome wagon for investors in high growth apparel trend stocks.

We did get some preliminary 2008 targets today. Under Armour said 2008 revenue and income from operations will come in ahead of prior goals of reaching long-term growth of between 20 to 25 percent.

Continue reading Under Armour gives equal ammo for bulls and bears alike

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