Under Armour sales fell 23 percent in the first quarter, with about two-thirds of the decline attributed to the Covid-19 pandemic.
The sports-apparel manufacturer and retailer recorded a loss of $589.7 million for the quarter after restructuring charges of $436 million were included.
Total sales were $930 million, with wholesale revenue down 28 percent and direct-to-consumer revenue down 14 percent.
Under Armour sales were down by 34 percent in the Asian market
“During the first quarter, our results in January and February were tracking well to our plan,” said Under Armour president and CEO Patrik Frisk.
“Since mid-March, as the pandemic accelerated dramatically in North America and EMEA and retail store closures ensued, we’ve experienced a significant decline in revenue across all markets. As a result, like so many businesses, we’ve had to make very difficult decisions, including temporarily laying off teammates in our US retail stores and distribution centers, along with other actions to ensure we protect Under Armour’s financial stability.”
In China, which accounts for about half Under Armour sales within Asia, the Covid-19 pandemic saw both company-owned stores and partners closing from late January, reopening from late March. By the end of that month, about 80 percent of stores had resumed trading.
“However, traffic in these locations, while recovering steadily in recent weeks, continues to be down year-over-year,” the company said in an earnings brief.
“Business results and trends in South Korea have been similar to those in China, while retail and partner locations outside of these countries in the Asia-Pacific region have remained predominantly closed since the end of the first quarter.”
Frisk said Under Armour management was taking decisive actions to continue the company’s transformation and improve efficiencies so it emerges from the restructure and the pandemic “with stronger and greater capabilities over the long-term”.