The products will be displayed at the Under Armor store in New York, November 4, 2019.
Brendan McDermid Reuters
According to the bumper on Friday, its revenues from the fiscal second quarter fell by 41%, but overall the results were better than the trader expected due to the increase in e-commerce.
The sneaker manufacturer estimated that approximately 80% of the stores where its goods 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 resistance than items sold at market prices. As a result, its gross margins increased by 280 basis points to 49.3%.
“Although revenues were understandably reduced, the company showed an incredible ability to increase gross margins,”
Under Armor, shares jumped about 12% in pre-sale trading.
Here’s how the retailer did in the quarter ended June 30, compared to analysts’ expectations of Refinitive:
- Loss per share: Expected 31 cents, adjusted for a loss of 41 cents
- Revenue: $ 707.6 million is expected versus $ 543.8 million
With the opening of the stores, the company said it was “encouraged” by the momentum it saw in June and July.
“However, we remain appropriately cautious about the 2020 balance due to the continuing uncertainty surrounding the dynamics of consumer shopping, the potential for a highly promotional environment and proactive solutions to reduce stock purchases in order to be more aligned with expected demand related to current COVID-19 impacts, “CEO Patrick Frisk said in a statement.
According to Armor, net loss for 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.
With the exception of the $ 39 million restructuring fee, the retailer lost 31 cents a share. That’s less than the 41 percent loss forecast, according to Refinitiv.
Revenue fell to $ 707.6 million from $ 1.19 billion a year ago. Analysts expected revenue of $ 543.8 million.
As a result, clothing sales fell 42 percent to $ 426 million, while shoe revenue fell 35 percent to $ 185 million and accessories revenue fell 47 percent to $ 56 million.
According to the Armor, it ended the quarter with $ 1.1 billion in cash and cash equivalents.
He said stocks had risen 24 percent to $ 1.2 billion.
Earlier this week, the Baltimore-based company said it had received notification of possible enforcement actions from the Securities and Exchange Commission related to the accounting treatment of sales, which it registered between the third quarter of 2015 and the fourth quarter of 2016
On July 22, Under Armor, along with two CEOs, Kevin Planck, its former CEO and current CEO, and David Bergman, the current CEO, received Wells reports related to a pre-discovered SEC probe, the company said in 8 -K submission.
A notice from Wells does not necessarily mean that the company or executives have violated the law. However, this shows that the agency is considering enforcement action. According to the armor, he said on Monday that he maintained his actions “appropriate” and intended to “work to resolve the issue”.
Towards the end of the market on Thursday, shares of Under Armor fell about 47% this year. The company has a market cap of about $ 5.2 billion.
Find the press release for the full profits from Under Armor here.