The American fashion retailer Under Armour could see a fall of 20 per cent to 25 per cent in its revenue in the second half of 2020.
While warning the same on Friday (31 July), the executives said that the gross margin of the company is expected to be under big pressure in next 6 months and it may not even have enough inventories if sales recover faster than expected.
And if that happens, then that would be a fall from what happened in Q2. The gross margin of Under Armour in Q2 rose to touch 49.3 per cent, which was higher than the gross margin during the same period in 2019 (46.5 per cent).
The retailer, in a statement, said that despite pandemic slowdown Under Armour has constantly stayed in touch with its customers through innovative digital activations in addition to pro-actively and effectively managing the cost structure.
Things have worked, but now the question is do they have enough inventories if the sale recoveries speed up.
According to a survey done by analysts at Bloomberg, the Q2 revenue despite falling by 41 per cent to touch US $ 707.6 million is much better than the estimated US $ 596 million.
Following this, the stocks rose, but soon fell by as much as 7.3 per cent.
Under Armour, which manufactures T-shirts, jackets, hoodies, pants and shoes, among others, definitely has plans to weather the tough second half and therefore it will be interesting to see its strategies over the period of next few months.