The products will be on display at the Under Armor store in New York on November 4, 2019.
Brendan McDermid | Reuters
According to Armor, its revenue in the fiscal quarter fell 41% on Friday, but overall its results were better than the retailer expected due to the increase in e-commerce.
The sneaker maker is estimated to have closed about 80% of its stores, including its own stores, due to a coronavirus pandemic by mid-May.
Sales directly to buyers have made its sales more profitable, and less traction from goods sold through price channels. As a result, its gross margin strengthened by 280 basis points to 49.3%.
“Although revenues were clearly reduced, the company has shown an incredible ability to increase gross margins,”; said BMO Capital Markets analyst Simeon Siegel in an interview. “They effectively capture more by less.”
Under Armor, shares jumped about 12% in pre-market trading.
Here’s what the retailer did during the quarter ended June 30, compared to what analysts polled by Refinitive expected:
- Loss per share: expected 31 cents, adjusted against a loss of 41 cents
- Revenue: $ 707.6 million. US dollars against 543.8 million dollars
After the stores opened, the company said it was “encouraged” by the current it saw in June and July.
“However, we remain duly cautious about the 2020 balance due to the constant uncertainty associated with the dynamics of consumer purchases, the potential to create a highly advertising-oriented advertising environment and active decisions to reduce inventory purchases to be more in line with expected demand. with the current COVID-19 impact, “said CEO Patrick Frisk in a statement.
According to Armor, net loss in the second quarter rose to $ 182.9 million, or 40 cents a share, from a loss of $ 17.3 million, or 4 cents a share, a year earlier.
Excluding a $ 39 million restructuring fee, the retailer lost 31 cents a share. According to Refinitive, this was less than the 41 percent loss forecast.
Revenue fell to $ 707.6 million from $ 1.19 billion a year ago. Analysts expected revenue of $ 543.8 million.
As part of this, clothing sales decreased by 42% to $ 426 million. US, and revenue from footwear fell by 35% to 185 million dollars. US, and revenue from accessories fell 47% to $ 56 million.
According to Armor, he ended the quarter with cash and cash equivalents of $ 1.1 billion.
According to him, inventories increased by 24% to $ 1.2 billion.
Earlier this week, the Baltimore-based company announced that it had received a notice of possible coercion from the Securities and Exchange Commission related to the accounting regime it had made between the third quarter of 2015 and the fourth quarter of 2016.
On July 22, Under Armor, in addition to two executives, Kevin Planck, its former CEO and current chief executive, and David Bergman, its current chief financial officer, received a Wells report related to a previously uncovered SEC probe, the company said. 8-K feed.
The Wells report does not necessarily mean that the company or executives have broken the law. However, this indicates that the agency is considering coercion. On Monday, Bronya said he claimed his actions were “appropriate” and that he intended to “work to resolve the issue.”
As of Thursday’s close, shares of Under Armor fell about 47% this year. The company has a market limit of about $ 5.2 billion.
Find the full press release of earnings from Under Armor here.