Under Armour warns 2nd quarter revenue could more than halve, shares tank
Under Armour Inc (UA.N) (UAA.N) forecast on Monday a 50% to 60% drop in second-quarter revenue as most of its stores remained closed because of the COVID-19 pandemic, sending the athletic apparel maker’s shares down about 11%.
The Baltimore-based company also reported bigger-than-expected loss for the first quarter and revenue that missed Wall Street estimates. About 80% of Under Armour’s business around the world remained closed since April, Chief Financial Officer David Bergman said, even as most of its own stores and wholesale operations in Asia have already reopened. “Although we do anticipate that our business will gradually reopen in the coming weeks and months, we believe there will be a number of challenges ahead for us,” Bergman told analysts. Bergman cited uncertainty how much consumers will spend once stores reopen and a threat of deep discounts retailers may offer to woo shoppers back. Last month, the company temporarily laid off about 600 staff at its U.S.-based distribution centers, extended store closures, and withdrew its forecast for the year.
Several retail and department stores, including Neiman Marcus and J.C. Penney that are on the brink of bankruptcy, that sell Under Armour merchandise were also closed during the last few weeks of the quarter. 11 May 2020
News Source Reuters