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Under Armour Earnings Preview: A Turning Point?

Investors are finding pockets of optimism in the footwear business, even though the North America landscape remains difficult. Skechers is gaining ground overseas, while Puma is becoming more popular in North America. Even Nike has been getting more love lately, after the company laid out new growth targets and talked up its ability to get products to customers faster.

But Wall Street remains downbeat on Under Armour, which reports quarterly earnings Tuesday morning. Shares are down 18% since the company’s last release three months ago.

Analysts are calling for 19 cents a share in earnings, down from 29 cents a year ago, on revenue of $1.5 billion, which is about even with last year’s numbers. A couple years ago, Under Armour was seen as a growth company.

In the most recent quarter, the company benefitted from its partnership with Kohl’s, which wasn’t in place a year earlier, but it’s also struggling to develop styles that register with consumers. On the earnings conference call, management may provide more information about supply and demand for its new Curry 4 shoe.

Stifel’s Jim Duffy thinks that Wall Street’s estimates for the quarter mark a “low bar” to clear, and he predicts that investors will be paying more attention to what Under Armour has to say about “strategic shifts that can lead to stabilization of pricing” as well as its plans to restructure the company.

Big Picture: With Under Armour set to announce earnings on Tuesday, expectations are muted.

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