Adrian Gomez Investments

The first quarter for 2018 is gone and an earnings date has been announced for UA 's on May 1. I have been reading their latest 10-K filing and trying to find a clue on where the Company is headed. My findings are nowhere near pleasant but I assure you I've given this my best case scenario on everything and even then the numbers don't look good. Let me start with " Net Revenue " , the Company has been showing signs of deceleration in that area. It had been expanding at an average rate of 21.2 % annually over the last 4 years but with the slowest of them being last year at only 3.2%. Being generous, I will give this area an estimated 10% increase to an expected $1,229M when compared to same quarter last year of $1.12B . I said I am being generous because not only the company has shown signs of deceleration when it comes to Net Revenue but it has actually decreased in the sales here in North America where it lost 5.1% during 2017 (the equivalent to al...

This past weekend I was able to experience first hand what is going on at Under Armour’s stores. I must mention that the store I visited was not an outlet store but a regular one inside a big mall. I happened to be in the Grapevine area in Texas where the Gaylord Texan Resort is located. My thirteen year old daughter had a competition and I decided to take her. So I was naturally able to scout the area in search for clues on how the company is doing. I started by visiting Dick’s Sporting Goods and to my surprise the store was somewhat empty (meaning no customer traffic) and you couldn’t find many discounts around. I gave my wife the opportunity to look for one item that she likes (she takes yoga classes so I knew she was going to look for some pants or tops), after looking around she settled on some yoga pants but not from Under Armour, it was Nike’s and paid full retail price on them ($63.99). I, on the other hand, got myself an Under Armour cap for which I also paid full retail (...

Summary Revenue growth has decelerated considerably. Margins continue to shrink. Operating Income is almost non existent now. Under Armour's ( UA , UAA ) revenue as reported in their 10K for 2017 showed signs of deceleration and margins shrinkage causing their financials to deteriorate. Revenue stopped improving while their COGS (Cost of Goods Sold) and SG&A (Selling, General & Administrative Expense) continued their upward trend. This all started in 2015 when the Total Revenue of the company started to decelerate. From an impressive 32.25% increase in 2014 to a marginal 3.15% in 2017. But, who can blame a company increasing its revenue at double digits per year? It wasn't until 2017 that the company apparently found its peak.  COGS as % of Revenue also is showing signs of stress. In 2017 the company reported that for every $100.00 dollars in revenue it had to spend $55.02 to produce or buy the merchandise and services they sell. When in the past it w...

It is well known that leverage is good, or at least that's what we think when it comes to managing the finances of a company or even in real estate. The more we use other people's money to increase our wealth the better. However, given the position that Under Armour., Inc. ( UA , UAA ) is in right now it may be signaling a distressed balance sheet in the near future.  The company has come from having a somewhat conservative stance when it comes to debt-to-equity ratio in 2013 at a 49.77%, to being aggressive in 2017 at 98.47% , to being desperate in 2018 where it was announced in their 10K filing that "In February 2018, we amended our credit agreement to increase our permitted leverage ratio during certain quarters in 2018". It is true that in the filing doesn't specify what type of leverage ratio they were talking. Nevertheless, taking a look at the Shareholder's Equity and comparing it with the Current Liabilities and the Total Liabilities we can ...

Capstone Turbine Corp (Nasdaq: CPST) This company has been in the business of developing, manufacturing and marketing microturbine technology solutions for a wide range of businesses around the world. Put in simple words, they make turbines to create clean energy relying very little in fossil fuels to do so. You can visit their  website  to read more of them. I started following this company about 2 years ago when the price of the stock was about $1.00 or so. I didn't buy there because to me it was too risky and the down potential was far bigger than making money on it. No the company is trading double that price and it is starting to gain traction. As you can see on their  Income Statement  posted on Yahoo Finance, the company has been increasing the sales every year for the past three and it looks just as good on this year. A recent video post  on You Tube about Walmart introducing a new type of truck (18 wheeler) that will reduce emissions and im...

Today, November 20, 2013 JC Penney announced its third quarter results with a press release followed by a conference call before the markets opened for business. Overall, I believe that it was good news for the longs (such as myself). However, skepticism is still hanging in there as the material results were disappointing and the only good news are the trends that seem to be improving but are yet to show on the quarterly results. As promised, I will give you, what I believe are the most important things from the conference call and quarterly results for your review. Mike Ullman the CEO mentioned that "the turnaround for J.C. Penney is beginning to take hold" He also said that during the third quarter "we began generating positive sales momentum". Nevertheless, those positive sales trends are not yet materialized and reflected into this quarter results. Margins on sales are not yet improving. In fact, they are deteriorating based on the same period last yea...