Under Armour, Inc. (Under Armour) is scheduled to report Q4 2010 results on Thursday, January 27, 2011. In the last four quarters ending September 2010, the company's reported EPS exceeded analysts' consensus estimates by margins in the range of 13.33% and 133.33%.
UA participates in the sports apparel market, a $28 billion wholesale market in 2009 according to SGMA (the Sporting Goods Manufacturers Association). This large inclusive market consists of casual or informal wear, suitable for recreation and ranges from casual commodity-like T-shirts, fleece, outerwear and various sundry casual attire made of cotton to synthetic sports apparel designed for active sports. The niche "active use" market consists of apparel designed specifically for sport or multi-sport, an estimated $12 billion (wholesale) market. The rapidly growing market niche of compression (tight-fitting) sports apparel represents about $1.164 billion at the manufacturer shipment level according to SGMA, and we believe UA is the leader with approximately 60% of the market. SGMA projects manufacturers shipments of sports apparel will grow about 2% in 2010.
The company reported a net income of $34.86 million, or $0.68 per share, for the third quarter ended September 30, 2010, compared to $26.18 million, or $0.52 per share, for the third quarter ended September 30, 2009. Net revenue for the third quarter of 2010 was $328.57 million, an increase of 22%, compared to $269.55 million for the third quarter of 2009. Net income for the first nine months ended September 30, 2010 was $45.53 million, or $0.89 per diluted share, compared to $31.58 million, or $0.62 per diluted share, for the first nine months ended September 30, 2009. Net revenue for the first nine months of 2010 was $762.76 million, compared to $634.19 million for the first nine months of 2009.
Analysts' EPS estimates for the fourth quarter of 2010 range from a low of $0.33 to a high of $0.41, compared to a consensus estimate of $0.36 or year ago eps of $0.3. Analysts' revenue estimates for the fourth quarter 2010 range from a low of $268.9 million to a high of $279.3 million compared with a consensus estimate at $272.98 million or reported revenue of $222.22 million in the same quarter a year ago. For the fourth quarter, the consensus EPS forecast has remained the same over the past week at $0.360 and remained the same over the past month at $0.360. Of the 2 analysts making quarterly forecasts, 2 raised and none lowered their forecast.
In the last one year, the closing share traded in the range of $23.72 and $60.14. In the last one year, the closing share price has gained $25.87 or 88.75%. I forecast 2011 earnings per share at $1.55, and see 2012's at $1.9. Based on these estimates, I set a target price of $50.5.
