Coronavirus outbreak to impact Under Armour’s Q1 sales by 50 to 60 million dollars
Prachi Singh | Tuesday, February 11 2020
Under Armour, Inc. revenue was up 4 percent to 1.4 billion dollars, while the revenues also rose 4 percent currency neutral in the fourth quarter. The company said, gross margin increased 230 basis points to 47.3 percent , while net loss was 15 million dollars or 3 cents diluted loss per share
“Under Armour is an operationally better company following our transformation over the past few years, with a clearly defined and focused strategy, enhanced go-to-market process, cleaner inventories and a stronger balance sheet,” said Under Armour President and CEO Patrik Frisk in a statement, adding, “However, ongoing demand challenges and the need to drive greater efficiencies in our business requires us to further prioritize our investments to put our company in the best position possible to achieve sustainable, profitable growth over the long-term.”
Under Armour warns of coronavirus impact on Q1 sales
Revenue was up 1 percent for the full year to 5.3 billion dollars and 3 percent currency neutral. Gross margin for the year was 46.9 percent, a 180-basis point improvement from 45.1 percent in the prior year and net income was 92 million dollars or 20 cents diluted earnings per share.
The company added that its initial 2020 outlook currently includes an estimated negative impact of the coronavirus outbreak in China of approximately 50 million dollars to 60 million dollars in sales related to the first quarter of 2020 and said that given the significant level of uncertainty with this dynamic and evolving situation, full year results could be further materially impacted.
For the full year 2020, revenue is expected to be down at a low single-digit percent compared to 2019 results reflecting a mid to high-single-digit percentage decline in North America. The international business is expected to grow at a low double-digit percentage rate. Gross margin is expected to be up approximately 30 to 50 basis points, operating income is expected to reach 105 million dollars to 125 million dollars and diluted earnings per share is expected to be in the range of 10 cents to 13 cents, inclusive of an estimated 1 cent to 2 cents negative impact from the company’s equity interest in its Japan licensee.
Picture:Under Armour newsroom