The Epidemic Or Under Armour Lost More Than US $50 Million This Quarter.

Source: UA official website screenshot

In February 11th, the US sports apparel brand Under Armour (Andemar) released the key financial data in the fourth quarter of fiscal year 2019, with net sales rising 4% to 1 billion 440 million US dollars compared with the previous year, lower than analysts' expected $1 billion 470 million. In the fourth quarter, business growth in North America remained weak, with a net loss of $15 million 300 thousand in Under Armour and a net loss of $0.03 per diluted share.

Meanwhile, Under Armour predicts that the new crown pneumonia epidemic will have a negative impact on the sales performance of the Asia Pacific market in the first quarter of fiscal year 2020, and the net sales volume for the 2020 fiscal year is expected to decline in the low unit number of 5000-6000.

At present, Under Armour China stores have temporarily closed about 600. Patrik Frisk, chief executive of Under Armour, said in a conference call, "taking into account the uncertainty of the epidemic, it is very likely that the financial and operational aspects of Under Armour will be severely affected in the coming year."

After the news, Under Armour shares fell sharply, as of the end of February 11th, the stock fell 18.88% to 16.59 U.S. dollars per share.

North American market sales account for nearly 70% of total sales, which is one of the most important markets of Under Armour. But in recent years, its performance has not been ideal, and it is more and more difficult to compete with Nike and Adidas. Under Armour has adopted a discount promotion strategy for offline retail outlets including department stores to attract North American consumers, but on the other hand, it has squeezed profits. Patrik Frisk said in a conference call, "I am not satisfied with the current situation. Although we have optimized inventory and promotion, the growth of demand in North America is still weak."

In the fourth quarter, Under Armour's sales in North America increased by 1.9% to $983 million over the same period last year. In view of the sluggish growth trend in North America, Under Armour began to re-examine the plan to invest 2.25-2.5 billion in building flagship stores in New York, and may abandon this shop plan. For the North American market in the 2020 fiscal year, Under Armour is expected to drop in unit number or high unit number.