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Under Armor (UAA) reports that Q2 2020 earnings have hit



The products will be on display at the Under Armor store in New York City, November 4, 2019.

Brendan McDermid | Reuters

Friday under Armor said second-quarter tax revenue fell 41%, but overall its results came out better than the retailer was expecting thanks to a boost in e-commerce .

The sneaker maker estimated about 80% of the stores where its merchandise can be purchased, including its own stores, were closed due to the coronavirus pandemic by mid-May.

Selling directly to customers made its sales more profitable and there was less crawling than goods sold on out-of-price channels. As a result, its gross margin strengthened 280 basis points to 49.3%.

“Although the revenue was well understood, the company showed incredible ability to raise gross margins,” BMO Capital Markets analyst Simeon Siegel said in an interview. “They actually catch more on less.”

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Shares under Armor jumped about 12% in the premarket business.

Here’s how the retailer did during the quarter ended June 30 compared to what analysts survived from Refinitiv were expecting:

  • Loss per share: 31 cents, adjusted, against a loss of 41 cents, expected
  • Revenue: $ 707.6 million versus $ 543.8 million, expected

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

“However, we remain appropriately cautious about the 2020 balance due to continued uncertainty related to consumer purchasing dynamics, the potential for a high promotion environment and proactive decisions to reduce purchases. of inventory to be more in line with the anticipated demand related to continued COVID. 19 impacts, “Chief Executive Patrik Frisk said in a statement.

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

In addition to a $ 39 million restructuring fee, the retailer lost 31 cents a share. This was lower than analysts predicted the loss of 41 cents, according to Refinitiv.

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

Within that, apparel sales fell 42%, to $ 426 million, while footwear revenue fell 35% to $ 185 million, and accessory revenue fell 47%. % to $ 56 million.

Under Armor he said he ended the quarter with cash and cash equivalents on the side of $ 1.1 billion.

That said inventories were up 24% to $ 1.2 billion.

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

On July 22, Under Armor along with two executives – Kevin Plank, its former CEO and current executive chairman, and David Bergman, its current CFO – received Wells notices related to a disclosed probe agreed by the SEC, the company said in Filing 8-K

A notice in Wells does not necessarily mean that the company or executives have broken the law. However, this indicates that the agency is considering enforcement action. Under Armor said Monday that she maintains her actions were “appropriate,” and that she intends to “work toward resolving this issue.”

As the market closed on Thursday, shares of Under Armor are down about 47% this year. The company has a market cap of about $ 5.2 billion.

Find the full earnings press release from Under Armor here.


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