UA: Business Trend Update

Here’s a follow-up to our earlier note on UA. How is business? Here’s some charts showing both apparel and footwear point-of-sale info for UA. It would be unfair to say that it is getting clocked out there, because performance – broadly speaking – is fine. But when you end the prior quarter with inventories +74%, you need better than “fine”, you need “outstanding”. That’s not in the cards.


Versus last year, we’re seeing UA’s share gains in apparel continue to slide – to the point where the latest trends are actually down (we look at this data on a trailing 3-week basis).


Similarly, the company is seemingly not gaining traction in footwear. That’s no revelation to the Street at large. But the reality is that UA went out and hired Gene McCarthy – who we’ve thought to be among the best talent in the space – and after 25 months, they still have little to show for it (at least based on product quantity, quality and performance).


Will UA get Footwear right? Yes, we definitely think so. But the clock is ticking, and UA is running out of time where the Street will simply give them a pass simply because they have a killer brand. In other words, footwear will cost either time or money – and the Street has little tolerance for either.  


We continue to think that there’s a big duration mismatch here. When the short-term investment factors come to roost just as 40% sales growth numbers are incrementally slowing (still stellar, but what matters is on the margin), we think there will be a much better shot to buy UA lower.




UA: Business Trend Update - UA apparel 9 6 11


UA: Business Trend Update - UA Compression 9 6 11


UA: Business Trend Update - NKE compression product 9 6 11


UA: Business Trend Update - UA FW sales 9 6 11


UA: Business Trend Update - UA FW 9 6 11


Brian P. McGough
Managing Director

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more

Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

read more

We'll Say It Again: Leave Your Politics Out of Your Portfolio

If your politics dictates your portfolio positioning, the Democrats and #NeverTrump crowd out there have had a hell of a week.

read more

Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more