Under Armour claimed Friday its financial second-quarter earnings dropped 41%, yet overall its results was much better than the retailer was anticipating thanks to an e-commerce boost.
The sneaker maker estimated about 80% of stores where its goods can be purchased, including its very own shops, were shut as a result of the pandemic via mid-May.
Offering directly to consumers made its sales a lot more rewarding as well as there was less of a drag from products being sold off-price channels. Because of this, its gross margins enhanced 280 basis points to 49.3%.
“Although revenues were understandably down, the company showed an incredible ability to raise gross margins,” BMO Capital Markets analyst Simeon Siegel said in an interview. “They’re effectively capturing more on less.”
Under Armour shares leapt 12% in premarket trading.
Here’s exactly how the seller did during the quarter ending June 30 compared with what experts survyed by Refinitiv were anticipating:
Loss per share: 31 cents, adjusted, versus a loss of 41 cents, expected
Revenue: $707.6 million versus $543.8 million, expected
With locations resuming, the company said it was “happy” by the momentum it was seeing in June as well as July.
“However, we remain appropriately cautious with respect to the balance of 2020 due to continued uncertainty related to consumer shopping dynamics, the potential for a highly promotional environment and proactive decisions to reduce inventory purchases to be more aligned with anticipated demand related to ongoing pandemic impacts,” Chief Executive Patrik Frisk said in a statement.
Under Armour stated its second-quarter net loss broadened to $182.9 million, or 40 cents per share, from a loss of $17.3 million, or 4 cents a share, a year earlier.
Leaving out a restructuring charge of $39 million, the merchant shed 31 cents a share. That was less than the 41-cent loss analysts were predicting, according to Refinitiv.
Profits was up to $707.6 million from $1.19 billion a year ago. Analysts anticipated income of $543.8 million.
Within that, apparel sales were down 42%, amounting to $426 million, while footwear earnings went down 35% to $185 million, as well as accessories income dropped 47% to $56 million.
Under Armour said it ended the quarter with cash and cash equivalents on hand of $1.1 billion.
It claimed stocks were up 24% to $1.2 billion.