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Mar 31, 2020
Under Armour Q1 2020 Earnings Report
Under Armour's financial results for Q1 2020 were reported, highlighting the impact of COVID-19.
Key Takeaways
Under Armour reported a 23% decrease in revenue to $930 million due to the COVID-19 pandemic, with significant declines in North America and international markets. The company is focusing on cost management and liquidity to navigate the crisis.
Revenue decreased by 23% to $930 million, with COVID-19 impacts accounting for approximately 15 percentage points of the decline.
Wholesale revenue decreased by 28% to $592 million, and direct-to-consumer revenue decreased by 14% to $284 million.
Operating loss was $558 million, which included $436 million in restructuring and impairment charges.
The company is reducing planned 2020 operating expenses by approximately $325 million through various cost-cutting initiatives.
Under Armour
Under Armour
Under Armour Revenue by Geographic Location
Revenue by Geographic Location
North America Revenue
CapyFin.comEMEA Revenue
CapyFin.comAsia-Pacific Revenue
CapyFin.comLatin America Revenue
CapyFin.com Forward Guidance
Due to the high level of uncertainty with respect to the duration and scope of the current COVID-19 event, the quantification of negative impacts on our financial and operating results cannot reasonably be estimated at this time. The company is expecting to reduce its originally planned 2020 operating expenses by approximately $325 million through various initiatives.
Positive Outlook
- Taking actions to limit broader marketing activations until we have greater visibility into the magnitude of virus impact on consumer demand and behavior.
- Reducing incentive compensation.
- Temporarily laying off teammates that worked in our owned retail stores and U.S.-based distribution centers.
- Tightening our hiring, contract services and travel and other discretionary and variable costs.
- Postponing planned capital expenditures contributing to reduced depreciation.
Challenges Ahead
- Uncertainty with respect to the duration and scope of this current event
- Quantification of negative impacts on our financial and operating results cannot reasonably be estimated at this time.
- Store closures
- Traffic declines
- Decreased net revenue and cash flow projections
Revenue & Expenses
Visualization of income flow from segment revenue to net income