Under Armour Inventory Problems Shall Pass: Analyst
Stifel Nicolaus Managing Director Jim Duffy told CNBC Thursday he is not concerned that Under Armour has cuts its 2012 sales growth outlook.
The sports apparel maker reported revenue and earnings growth for the quarter, but Under Armour's stock fell after it cut the outlook on too much inventory at retailers, saying the mild winter affected demand.
"The quarter was pretty solid, given the weather backdrop," said the analyst, who maintains his buy rating and a $92 price target. "Weather matters for these seasonal categories. It can push the numbers around temporarily. That tends to be a near-term phenomenon. That, too, shall pass."
He said Under Armour wasn't the only apparel maker with these problems because if retailers can't sell the goods, their working capital is tied up. That "limits their ability to buy, near term. I think that should pass in the second quarter and see capacity revised higher as the year progresses."
Additional Views: Under Armour Amid Grim Analyst Forecast
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Neither Duffy nor his company own shares of Under Armour.