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.