Under Armour today reported a "lower than expected loss for the second quarter but missed sales forecasts as it followed a turnaround plan designed to boost struggling U.S. sales," according to Lorraine Mirabella of the BALTIMORE SUN. UA reported a net loss of $17M for the three months that ended June 30. Revenue rose 1% to $1.192B, missing an expected $1.199B. In a revised outlook for the year, UA now "expects a slight decline instead of flat sales in its key U.S. market, where it’s up against rivals such as Nike and Adidas." GlobalData Retail Managing Dir Neil Saunders noted that sales in the U.S. division have been "falling for a year, with the pace of decline accelerating." However, Under Armour Founder, Chair & CEO Kevin Plank said that the company is "on track for the year" and focused on "expanding geographically." U.S. sales fell 3% in Q2 to $816M. UA saw "gains in footwear," with sales up 5% to $284M, while apparel sales fell 1%, to $740M (BALTIMORE SUN, 7/30).
TAKING A STEP BACK: CNBC’s Carl Quintanilla said this is "going to be the worst day in almost two years" for UA. CNBC's Jim Cramer said he "didn’t think they would be as flat as they were." CNBC’s Sara Eisen noted UA had "some improvement” to talk about on costs, margins and inventories as the company is a "few quarters into a multi-year turnaround story." UA would "point to that as saying things are getting better." The brand feels "good about the progress that they’re making, at least to make a more healthy, sustainable, profitable company" (“Squawk on the Street,” CNBC, 7/30). FORBES' Lauren Debter notes UA "relies on North America for two thirds of its business," but sales have "faltered amid intense competition from rivals like Nike, Adidas and Lululemon." That is "despite a growing preference among consumers toward comfortable, athleisure apparel." UA has been "forced to offer frequent discounts on its products in an effort to whittle down high inventory levels (FORBES.com, 7/30). CNBC.com's Lauren Thomas writes UA's "biggest challenge remains getting back to growth in North America." The market is seeing shoppers "increasingly buying athletic apparel and sneakers as casual wear," but UA's gear is "better known for being worn during high-endurance activities." The company has also said that it "wants to win over more women, but that’s as Nike is likewise trying to lure more female customers" (CNBC.com, 7/30).
CHARM CITY: The SUN's Mirabella notes Plank has "joined other city leaders in defending Baltimore," the brand’s hometown, after President Trump took to Twitter over the weekend to criticize U.S. Rep. Elijah Cummings (D-Md.) and his district. Plank on Sunday made an Instagram post that included a '17 UA video "depicting city neighborhoods, street scenes and athletes released for the sports apparel and footwear maker’s 'We Will' marketing campaign." The post was followed by Plank’s letter to the editor of The Baltimore Sun, co-written with John Hopkins Univ. President Ronald Daniels and "signed by eight other CEOs and presidents of nonprofits and universities, stating that they and their institutions were proud to call Baltimore home." Trump was "not named" in Plank's recent post. In Aug. '17, Plank and several other CEOS "resigned from Trump’s manufacturing jobs advisory council amid widespread criticism that the president did not quickly denounce racist groups that marched in a Charlottesville, Va., rally that turned violent" (BALTIMORE SUN, 7/30).
