Under Armour Trading Above 50 & 200-Day SMA: Bullish Signal Ahead?

Under Armour, Inc. UAA has demonstrated strong upward momentum, trading above its 50 and 200-day simple moving averages (SMA). SMA is a key indicator of price stability and long-term bullish trends. UAA ended Friday’s trading session at $10.12, above its 50 and 200-day SMA of $9.22 and $7.74, respectively, highlighting a continued uptrend. This technical strength, along with sustained momentum, indicates positive market sentiment and investors’ confidence in Under Armour’s financial health and growth prospects.UAA Trades Above 50 & 200-Day Moving AveragesImage Source: Zacks Investment ResearchShares of this leading designer and producer of innovative, niche footwear and accessories are 14.9% below its 52-week high of $11.89 attained on Nov. 7, 2024, making investors contemplate their next moves. In the past six months, UAA stock has rallied 48.6%, comfortably outpacing the Zacks Textile – Apparel industry’s 17.1% growth. The company’s ongoing strategic approach and product diversification have enabled it to outperform the broader Zacks Consumer Discretionary sector and the S&P 500 index’s growth of 18.7% and 13.3%, respectively, during the same period.UAA Stock Past Six-Month PerformanceImage Source: Zacks Investment ResearchUAA’s Strategic Transformation and Product RecalibrationUnder Armour is undergoing a strategic transformation aimed at redefining its product portfolio, enhancing brand perception and driving long-term growth. The company is focusing on premium offerings, targeted promotions and innovative customer engagement to seize new opportunities in the competitive athletic apparel market. To better balance performance and style, Under Armour is recalibrating its product line and reducing SKU complexity, with a clear emphasis on better and best products. As part of this shift, Under Armour is implementing a more targeted approach to promotions at its Factory House outlets, excluding certain key items from store-wide discounts. This strategy is designed to improve profitability while maintaining the exclusivity of premium products.Global Expansion and E-Commerce Growth of Under ArmourUnder Armour continues to expand its global reach through high-profile athlete endorsements, such as Stephen Curry’s successful promotional tour in China and the upcoming launch of De'Aaron Fox's signature shoe. These partnerships enhance the company’s visibility, especially among younger consumers, solidifying its position in the global sportswear market. Also, Under Armour is investing in its direct-to-consumer (DTC) channels, including a flagship store at its new headquarters, which strengthens brand affinity and reinforces the company's premium positioning. By moving away from heavy discounting, Under Armour has seen an increase in e-commerce full-price sales, now accounting for 50% of online revenues. The flagship store, which opened in Baltimore on Nov. 21, showcases a more curated product assortment and retail experience, setting the standard for future locations.The company’s loyalty program has also seen significant growth, with nearly 13 million members in the United States alone. In the second quarter, Under Armour added $6 million in new members to its ua.com platform. Active members now represent about half of the company’s U.S. DTC revenues, generating approximately 50% more revenue per consumer and nearly doubling the 90-day repurchase rate compared to non-members.Under Armour Forecasts Strong Growth for FY25Under Armour is projecting strong growth for fiscal 2025, with expectations for gross margin expansion of 125-150 basis points, an improvement from the earlier forecast of 75-100 basis points. This growth is driven by reduced promotional activity in direct-to-consumer (DTC) channels and favorable product costs.Adjusted SG&A expenses are expected to decrease by a low-to-mid single-digit percentage, while adjusted operating income is anticipated to reach $165-$185 million, up from the previous estimate of $140-$160 million. Adjusted earnings per share are forecasted to be between 24 cents and 27 cents compared to the prior range of 19-21 cents. Additionally, the company anticipates a gross margin increase of 150-175 basis points in the fiscal third quarter, supported by improved supply-chain efficiencies, favorable foreign exchange and reduced discounting.Estimate Revisions Favoring UAA StockAnalysts have responded positively to Under Armour’s prospects, which has been reflected in upward revisions in the Zacks Consensus Estimate for earnings per share. In the past 30 days, analysts have increased their estimates for the current fiscal year by 5 cents. The consensus estimate for earnings is pegged at 27 cents per share. The consensus estimate for earnings for the next fiscal year has been raised 3 cents to 35 cents per share.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Image Source: Zacks Investment ResearchConclusionInvestors may consider UAA stock due to its strong technical performance. The company’s strategic transformation, including product recalibration and focus on premium offerings, has improved profitability and brand perception. Global expansion, enhanced by high-profile athlete endorsements and e-commerce growth, positions Under Armour well in the competitive market. Moreover, its focus on improving gross margins, reducing promotional activity and increasing loyalty program engagement supports long-term growth prospects. Positive analyst revisions further bolster confidence in the stock's potential. The company currently carries a Zacks Rank #2 (Buy).Key PicksSome other top-ranked stocks are The Gap, Inc. GAP, Abercrombie & Fitch Co. ANF and Steven Madden, Ltd. SHOO.Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It presently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Gap’s fiscal 2025 earnings and sales indicates growth of 41.3% and 0.8%, respectively, from fiscal 2024 reported figures. GAP has a trailing four-quarter average earnings surprise of 101.2%.Abercrombie is a specialty retailer of premium, high-quality casual apparel. It sports a Zacks Rank of 1 at present.The Zacks Consensus Estimate for Abercrombie’s fiscal 2025 earnings and sales indicates growth of 67.5% and 14.9%, respectively, from the fiscal 2024 reported levels. ANF has a trailing four-quarter average earnings surprise of 14.8%.Steven Madden designs, sources, markets and sells fashion-forward name-brand and private-label footwear. It currently has a Zacks Rank of 2. The Zacks Consensus Estimate for Steven Madden’s 2024 earnings and sales indicates growth of 8.6% and 13.6%, respectively, from the year-ago actuals. SHOO has a trailing four-quarter average earnings surprise of 9.8%.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. This aggressive transition could mean tremendous profits for nuclear-related stocks – and investors who get in on the action early enough.Our urgent report, Atomic Opportunity: Nuclear Energy's Comeback, explores the key players and technologies driving this opportunity, including 3 standout stocks poised to benefit the most.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Abercrombie & Fitch Company (ANF): Free Stock Analysis Report The Gap, Inc. (GAP): Free Stock Analysis Report Steven Madden, Ltd. (SHOO): Free Stock Analysis Report Under Armour, Inc. (UAA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks