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Home / Business / Under Armor (UAA) reports earnings for the 2nd quarter of 2020

Under Armor (UAA) reports earnings for the 2nd quarter of 2020



The products are on display at an Under Armor store in New York City on November 4, 2019.

Brendan McDermid | Reuters

Under Armor said its second-quarter tax revenue fell 41% on Friday, but overall its results were better than the retailer expected thanks to a boost in e-commerce.

The shoe manufacturer has estimated approximately 80% of stores where its merchandise can be purchased, including its own stores, were closed due to the coronavirus pandemic until mid-May.

Direct selling to customers made sales more profitable and less sales of items sold on over-priced channels were reduced. As a result, its gross margins strengthened 280 basis points to 49.3%.

“While revenues were significantly lower, the company showed an incredible ability to raise gross margins,” BMO Capital Markets analyst Simeon Siegel said in an interview. “They̵

7;re actually capturing more and less.”

Armor shares jumped approximately 12% in the previous market trading.

Below are the retailer’s actions during the quarter ended June 30 compared to what Refinitiv analysts expected:

  • Loss per share: expected 31 cents, adjusted, compared to a loss of 41 cents
  • Revenue: $ 707.6 million compared to projected $ 543.8 million

With the reopening of stores, the company said it was “encouraged” by the momentum it was seeing in June and July.

“Still, we remain cautious enough about the 2020 balance sheet due to continued uncertainty related to consumer purchasing dynamics, the potential for a highly promotional environment and proactive decisions to reduce inventory purchases to be more aligned with the projected demand related to the ongoing COVID. 19 impacts, “Executive Director Patrik Frisk said in a statement.

Under Armor said its second-quarter net loss expanded to $ 182.9 million, or 40 cents a share, from a loss of $ 17.3 million, or 4 cents a share, a year ago. before.

Except for a $ 39 million restructuring charge, the retailer lost 31 cents of its stock. This was lower than analysts’ forecast of 41 percent, according to Refinitiv.

Revenue fell to $ 707.6 million from $ 1.19 billion a year ago. Analysts expect revenue of $ 543.8 million.

In this regard, garment sales fell 42% to $ 426 million, while footwear revenue fell 35% to $ 185 million, and accessory revenue fell 47 percent. % to $ 56 million.

Under Armor said it ended the quarter with $ 1.1 billion in cash and cash equivalents.

He said inventories rose 24 percent to $ 1.2 billion.

Earlier this week, the Baltimore-based company said it had received notice of a possible enforcement action by the Securities and Exchange Commission related to the accounting treatment of sales it booked among third parties. quarter of 2015 and the fourth quarter of 2016.

On July 22, Under Armor, in addition to two executives, Kevin Plank, its former CEO and current chief executive, and David Bergman, its current CFO, received warnings from Wells related to a probe previously released by the SEC , the company said in an 8-K file.

A Wells notice does not necessarily mean that the company or executives are in violation of the law. However, it indicates that the agency is considering an enforcement action. Under Armor said Monday it maintains its actions were “appropriate” and intends to “work to resolve the issue.”

At the close of the market on Thursday, shares of Under Armor have fallen by around 47% this year. The company has a market cap of about $ 5.2 billion.

Find the full Under Armor earnings press release here.


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