As shoppers spend extra time at dwelling, ditching work garments and fits for yoga pants and sweats, one would assume that sports activities attire model Beneath Armour (NYSE:UA) can be thriving.
However the firm that urged athletes to “Battle on Collectively” has fallen on powerful instances. Whereas the model’s sweat-wicking efficiency gear is standard amongst athletes, it won’t be resonating with shoppers the best way it used to.
Analysts say an athleisure increase is being fueled by a want for consolation and a newfound curiosity in well being and wellness. However shoppers are additionally focused on type and style, which is why rivals like Nike (NYSE:NKE), Adidas and Lululemon (NASDAQ:LULU) are doing so effectively.
Final month, the corporate reported third-quarter wholesale income was flat at $1.4 billion and attire income fell 6% to $927 million vs. $801 million consensus. Income from North America was down 5% to $963 million and worldwide income fell off 18% to $433 million.
Gross margin decreased 40 bps Y/Y to 47.9% of gross sales vs. 46.0% consensus, pushed primarily by unfavorable impacts from COVID-19 associated discounting and product combine partially offset by provide chain efficiencies and channel combine.
CEO Patrik Frisk stated, “Our third-quarter outcomes replicate significantly higher than anticipated efficiency because of larger demand and our sturdy execution, particularly in North America.
“We consider that the essential mass of our transformational challenges is behind us, and we stay sharply targeted on operational enhancements and monetary self-discipline to speed up methods to create sustainable, long-term progress for the Beneath Armour model and our shareholders.”
UA shares gained at Friday’s open, although, 27 cents, or 2.1%, to $12.88.