Under Armour released its second quarter earnings results Friday, which took the brunt of pandemic-induced shutdowns. The Baltimore-based apparel and footwear company also projected further steep losses for the second half of 2020.
With most of its stores closed, sales dropped 41% to $707.6 million — a year ago, sales were $1.19 billion. Specifically, apparel sales were down 42%, to $426 million; footwear revenue dropped 35%, to $185 million; and accessories revenue fell 47%, to $56 million.
The company surpassed $1 billion in sales in a single quarter for the first time in the third quarter of 2015, shortly after it signed on to sponsor Steph Curry through the 2024 season.
Under Armour estimated that about 80% of stores where its products are for sale, including its own, were closed. The revenue drop was actually less than expected, thanks to a boost in online sales.
The company reported a $131 million operating loss for the quarter.
During its earnings call, the company said it expects revenue to fall by 20-25% over the rest of the calendar year, with an even sharper decline in the fourth quarter. CFO David Bergman also warned that as a result of the company shrinking its inventories, there’s a chance it won’t have “adequate supply to meet demand” as the year goes on.
“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 COVID-19 impacts,” CEO Patrik Frisk said in a statement.
The company’s results are in line with those of competitors like Nike, who said its sales fell 38% in its most recent report.
Amid the down quarter, Under Armour has made headlines for trying to cancel its high-profile endorsement deal with UCLA, and another with Cal. The company set a record with its 15-year, $280 million contract with the Bruins and signed the Bears to a 10-year, $86 million deal in 2016.
Its other college partners include Auburn, Boston College, Cincinnati, Colorado State, Hawaii, Maryland, Navy, Northwestern, Notre Dame, South Carolina, Temple, Texas Tech, Utah, and Wisconsin.