“Significant” online sales growth meant Under Armour sales fell less sharply than it expected in the second quarter of its financial year, amid Covid-19 lockdowns.
Under Armour said that about 80% of stores selling its sportswear around the world were closed in mid-May and that even when shops reopened, footfall remains down on last year but conversion rates remained higher. This picture is expected to continue into the second half of its year. However online growth was one factor that meant the business performed better than expected.
Patrik Frisk, president and chief executive of Baltimore-based Under Armour, said: “With the majority of our own stores and wholesale locations closed for most of the second quarter due to the Covid-19 pandemic, while we performed better than expected we still experienced a significant decline in revenue across all markets.
“In navigating this environment, our team continues to respond strategically and methodically - amplifying Under Armour’s connection with our consumers through innovative digital activations, proactively managing our cost structure and working to harness our brand strength amid shifts in consumer behaviour to emerge as a stronger company.”
The retail brand, ranked Top250 in RXUK Top500 research, today reported revenue of $708m (£535.7m) in the second quarter of its financial year to the end of June, down by 41% on the same time last year. Its direct-to-consumer sales of $368m (£278m) were down by 13% on last time, while wholesale revenues of $299m (£226m) were down by 58% on last time. Sales in its European division fell by 39%, while sales were also down in its home North America market (-45%) and in Asia-Pacific (-17%), and Latin America (-72%). It reported a net loss of $183m (£138m), although when the $39m (£29.5m) impact of restructuring and asset write-downs was excluded that came to an adjusted net loss of $141m (£106m).
Frisk said the retailer was encouraged by the momentum it had seen in June and July but remained cautious about the rest of the current year because of “continued uncertainty related to consumer shopping dynamics, the potential for a high promotion environment and proactive decisions to reduce inventory purchases to be more aligned with anticipated demand related to ongoing Covid-19 impacts.”