Andrew's Two Quarter Of Mixed Feelings, Long Recovery Still Needs To Persist.

Under Armour (NYSE:UA), the sportswear brand, will announce its second quarter earnings in the 2019 fiscal year on Tuesday.

According to the financial instruments data of Investing.com, the market is now generally expected that Andrew will fall into a loss this quarter, and EPS fell from $0.05 in the previous quarter to $-0.05, compared with a loss of $0.08 per share in the same period last year. Revenue is expected to grow by 2% over the same period last year, at a level of 1 billion 200 million dollars.

In the first quarter, Andrew was sold by overseas market and footwear sales.

From the first quarter earnings report released by Andrew Ma, the company's profits exceeded expectations in the first quarter, earning a net profit of $22 million 477 thousand or earnings per share of $0.05, compared with a net loss of $30 million 244 thousand or a loss of $0.07 per share in the same period last year. The market expects the sporting goods group to maintain its breakeven only in the first quarter.

Meanwhile, in the first quarter of 2019, Andrew gross profit margin continued to improve, a 100 basis point increase of 45.2% over the same period last year. In 1-3, Andrew's revenue recorded an increase of 1.6% from $1 billion 185 million 400 thousand to $1 billion 204 million 700 thousand.

In the first quarter, the core garment business of the company appeared to be weak, and the sales of related accessories also fell. However, the weakness of this part was completely offset by the strong growth of its footwear sales, which is one of the reasons for the company's turning losses into profits.

It should be noted that in the first quarter, the North American market of anmar's income was $843 million 200 thousand, although it was 2.8% lower than the US $867 million 500 thousand in the same period in 2018, but far better than the 5.5% decline expected by the market. Asia Pacific market revenue rose 24.9%, from 115 million 500 thousand US dollars to 144 million 300 thousand US dollars, which is the main kinetic energy to drive the company to grow reluctantly.

Subsequently, because of the encouragement of this financial report, the management of the company raised its profit forecast for the whole year.

Andrew's two quarter results were mixed.

For the two quarter performance of andea, as the weakness of the North American market continued, Andemar chose to bet on the international market in order to find a breakthrough in sales performance, and the performance of this part of the market is still worth looking forward to.

At the same time, other direct consumer oriented channels such as direct sales and online direct marketing are also worth investors' attention. The company has more flexible pricing power, and can take a more proactive advantage in a weak market environment where demand is weak.

However, investors need to pay attention to the fact that compared with last year, the improvement of net profit will help to improve the company's profitability, but in the short term, I am afraid it is not enough to turn the profit into deficit. Although the company has an advantage in pricing and marketing initiatives, it may help the company increase its profit margin in the quarter, but the cost and other distribution costs of the company are rising, which may offset the company's gains in other areas.

The sharp increase in costs is also a challenge Andemar needs to face. Nike's earnings report last month also showed that the company's earnings per share fell to $0.62 in the four quarter, which is also lower than market expectations. The increase in sales and management costs and higher tax rates offset the strong impact of strong global sales, higher gross margin and fewer average shares.

Andrew resuscitation "not to fight for the day and night", management "long-term plan".

Andemar is now trying to increase sales growth in direct consumer business through expanding store size and strengthening online direct sales. In the first quarter of 2019, the company accounted for 27% of global revenue.

At the same time, it is worth noting that Andemar has made several acquisitions recently, including the acquisition of MapMyFitness, Endomondo and MyFitnessPal. Besides, management also hopes to boost growth by means of three platforms, namely, HOVR, Charge and Micro G. The company plans to gather more resources through the acquisition in a wider fitness market, in order to meet the growing market demand of consumers' awareness of fitness.

On the whole, Andemar's recovery will be a long process, which requires the persistence of the management of the company under the transformation plan and its close attention to the technology based fitness products.

In terms of stock prices, Andrew stock has risen by about 55% since 2019, but it has had a rough road, and its stock has risen 34% in the past 12 months.