Under Armor stores are reopening across the county after being forced to close due to the Covid-19 crisis, but shoppers aren’t showing up like they used to, according to the retailer’s CEO.
“The consumer is there, but it’s still not close to pre-Covid levels … there are doubts,” Under Armor chief executive Patrik Frisk told CNBC’s Sara Eisen on Friday morning just after from the company’s second-quarter earnings report. .
“The consumer is buying, and when they do, the store conversion is better,” he said. “But traffic is still depressed … We think that kind of tentative consumer focus will continue.”
Shares of Under Armor fell more than 8% on Friday afternoon, after management said during a profit call that the company forecasts revenue to drop 20% to 25% in the second half of the year. Within that time period, he said the falls could be worse during the fourth quarter, which includes the biggest holiday season. And he also warned that 2020 gross margins could end the year lower year-over-year, due to increased promotional activity.
“We are taking a more conservative perspective in the second half of the year,” Frisk said on CNBC.
“We don’t know how the consumer will navigate the second half of this year … how the return to school will develop,” he said.
Under Armor is not alone in navigating such unknown territories in the retail industry. Analysts say this year’s back-to-school shopping seasons and holidays could be like nothing these companies have ever experienced before, making it difficult to plan for demand both in stores and online.
Few retailers have offered Wall Street a prospect for 2020, as some have already mentioned preparing for a second potential wave of Covid-19 cases skyrocketing in the U.S.
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