Under Armor is also stained red by the coronavirus. The American fashion and sports equipment company has closed the second quarter (between April and June) with losses of $ 183 million. Revenue sank 41%, to $ 708 million, from the impact of the closures due to the coronavirus.
North America, the largest market for the group, was also the one that suffered the most from the Covid-19. The company sank its sales in the region by 45%, to $ 450 million. International business, for its part, fell 34% thanks to the resistance of the Asia Pacific, where it only contracted 20%.
By categories, accessories performed the worst, although it is also the one that contributes the least to the group, with 56 million in the second quarter, 47% less. Clothing sales fell 42%, up to $ 426 million, and those of footwear withstood the blow better, with a decrease of 35%, to $ 185 million.
Under Armor anticipates a highly promotional environment and new impacts of the Covid-19 on demand
Under Armor closed the period in losses even though it managed to reduce its fixed expenses operating 15% and to increase its margin by 280 basis points, up to 49.3%. The red numbers were due in part to restructuring costs of $ 39 million.
For the full year, the company anticipates an expense of $ 475 million for restructuring, including direct costs and devaluation of assets. Under Armor's inventory soared 24% in the period, to $ 1.2 billion.
After the crash in the second quarter, Under Armor closed the first half of the year with a turnover of $ 1,608 million, 31.7% less. The net result was negative at 727.8 million, compared to the profit of 23.8 million in the first half of 2019.
Patrick Frisk, who since last year has been president and chief executive officer of the group, assured that the evolution of the second quarter has been better than expected. "Now, with most of our outlets reopened, we are encouraged by the momentum registered in June and July"Said the executive.
"However, We will continue to be cautious about the end of 2020 due to continued uncertainty related to consumer habits, the potential for a highly promotional environment and proactive decisions to reduce purchases to be more aligned with the impact of Covid-19 on demand, "he concluded.