Under Armour Q2 2020 Earnings Report
Key Takeaways
Under Armour reported a 41% decrease in revenue to $708 million due to the COVID-19 pandemic. Despite the revenue decline, gross margin increased by 280 basis points to 49.3%. The company experienced a net loss of $183 million, or $0.40 per share.
Revenue decreased 41 percent to $708 million, impacted by the COVID-19 pandemic.
Wholesale revenue decreased 58 percent to $299 million, and direct-to-consumer revenue decreased 13 percent to $368 million.
North America revenue decreased 45 percent to $450 million, while international revenue decreased 34 percent to $224 million.
Gross margin increased 280 basis points to 49.3 percent due to channel mix and higher direct-to-consumer sales.
Under Armour
Under Armour
Under Armour Revenue by Segment
Under Armour Revenue by Geographic Location
Forward Guidance
Due to ongoing uncertainty related to COVID-19 and its potential effect on global markets, the company continues to anticipate material impacts on its business results for the remainder of 2020.
Positive Outlook
- Most locations where the brand can be purchased have reopened.
- Traffic trends continue to be considerably lower than the prior year period, however, the overall rate of conversion is higher.
- The company experienced significant eCommerce growth around the world during the quarter.
Challenges Ahead
- Traffic trends are expected to remain lower for the remainder of 2020.
- Continued uncertainty related to consumer shopping dynamics.
- Potential for a highly promotional environment.
- Proactive decisions to reduce inventory purchases to be more aligned with anticipated demand related to ongoing COVID-19 impacts.
Revenue & Expenses
Visualization of income flow from segment revenue to net income