Under Armour Inc A (UAA)

Interest coverage

		Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-38,677	-45,135	-33,399	-70,218	226,847	241,264	311,826	291,763	303,823	306,582	264,878	334,188	423,523	526,808	661,033	605,084	350,529	-320,120	-484,003	-478,283
Interest expense (ttm)	US$ in thousands	2,344	2,960	2,960	3,333	2,615	3,650	5,265	8,447	12,826	17,329	16,000	21,706	29,008	36,991	51,713	57,407	55,436	47,259	37,610	28,310
Interest coverage		-16.50	-15.25	-11.28	-21.07	86.75	66.10	59.23	34.54	23.69	17.69	16.55	15.40	14.60	14.24	12.78	10.54	6.32	-6.77	-12.87	-16.89

March 31, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-38,677K ÷ $2,344K
= -16.50

The interest coverage ratio of Under Armour Inc A has shown significant fluctuations over the periods analyzed. Initially, the company had negative interest coverage ratios indicating that its operating income was insufficient to cover its interest expenses. However, starting from December 31, 2020, the interest coverage turned positive and began to improve consistently quarter over quarter.

The company's interest coverage ratio increased substantially from March 31, 2023, reaching its peak at December 31, 2023. During this period, the company's operating income was significantly higher than its interest expenses, indicating a strong ability to cover interest payments comfortably.

However, the interest coverage ratio deteriorated sharply from June 30, 2024, to March 31, 2025, with negative values recorded in each quarter. This suggests that Under Armour Inc A's operating income was insufficient to cover its interest payments during this period, which could raise concerns about the company's financial health and ability to service its debt obligations.

Overall, while the company experienced a period of strong interest coverage, the recent negative trends raise some red flags regarding its ability to meet interest expenses in the short term. Investors and analysts may need to closely monitor the company's financial performance and debt management strategies to assess the sustainability of its operations.