Following as similar recent move by Standard & Poor’s, Moody’s has revised its outlook for Under Armour to positive from negative because of its improved operating performance, especially in North America, and better credit metrics and liquidity. The agency has upgraded its speculative grade liquidity rating for UA to SGL-1 from SGL-2, pointing to unrestricted cash of $1.35 billion on its balance sheet by March 31, full availability under its unrated $1.1 billion revolving credit, positive cash flow and “ample covenant headroom.” Moody’s has maintained its corporate family rating of B3 and its probability of default rating of Ba3 for the company. While its operating margins remain weak, the agency expects that they will improve over time as “turnaround efforts have begun to have a positive effect.” It also noted that its apparel business has potential for particularly strong organic growth in an underpenetrated international market.

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