On August 1, Beijing time, Under Armor announced its 2020 Q2 financial report. The financial report showed that Under Armor’s Q2 revenue fell 41% year-on-year to US$707.6 million, which was better than the expected US$543.8 million. However, the net loss increased 10 times compared with the same period last year, significantly expanding from US$17.3 million in the second quarter of last year to US$182.9 million. In this regard, Under Armor warned that revenue may fall by 20%-25% in the second half of 2020, and the decline will be even greater in the fourth quarter.
Just after the financial report was released, the share prices of Under Armour’s Class A shares and Class C shares were on the U.S. stock market dropped 10% in pre-market trading.
From a global market perspective, Under Armor’s North American revenue fell 45% year-on-year to US$450 million; international market revenue fell 34% to 224 million US dollars, of which revenue in the Asia-Pacific market fell by 20% and revenue in the Latin American market fell by 72%. In terms of product categories, revenue from clothing dropped 42% to US$426 million; revenue from footwear dropped 35% to US$185 million; revenue from accessories dropped 47% to US$56 million. In this regard, Under Armor CEO Patrick Frisk said that the main reason for the sudden drop in revenue was the closure of stores and the decline in customers’ willingness to spend during the epidemic, but Under Armor has gradually reopened between June and July. in most stores.
On June 28, according to a report by USA Today, Under Armor was preparing to terminate its relationship with the University of California, Los Angeles (UCLA) )’s $280 million apparel sponsorship deal. The 15-year, $280 million sponsorship contract was signed in 2016 and is the largest sneaker and apparel sponsorship deal in NCAA history.
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