Under Armour Reports Second Quarter Loss as Sales Continue to Shrink

Under Armour is still not finding its way. The sports equipment company closed the second quarter of the year with its accounts in the red, while continuing to reduce its sales. With the presentation of results, the company has lowered its annual forecasts.

Baltimore-based Under Armour ended the second quarter with a 4.72% drop in revenues, which stood at $1.333 billion. This performance also marks the year-to-date, as sales at the end of the half-year fell by 4.45% to $2.467 billion.

The company recorded an operating income of $17 million, a sharp drop compared to the $173 million the group earned in the first quarter of last year.

The company’s gross margin fell by 250 basis points in the second quarter to 47.3%, “primarily due to supply chain headwinds driven by higher tariffs and a less favorable channel and regional mix.“ “Gains from foreign exchange and pricing helped offset some of these impacts,“ the company has added.

Under Armour closed the second quarter in the red by $18 million

In the second quarter, Under Armour has entered into losses, with a net loss of $18.81 million, compared to a profit of $170 million in the same period last year. The accumulated loss for the first half of the year amounted to $21.43 million.

By markets, sales of the company led by Kevin Plank fell by 8% in North America, which contributed $792 million to sales in the second quarter. In international markets, on the other hand, revenues rose by 2% (to $551 million), with growth in Europe and Latin America and declines in Asia.

Halfway through the year, Under Armour has adjusted its forecast for the full year. The company now projects a 4% to 5% drop in revenues due to weakness in the United States and Asia. Operating income will be between $19 million and $34 million.

In May of last year, Under Armour announced the implementation of a restructuring plan to correct developments at an estimated cost of $160 million. “At the end of the second quarter, the plan had resulted in the company recording $103 million in restructuring and impairment charges, as well as $44 million in other transformation-related charges,“ the company detailed.