Under Armour Inc.’s direct-to-consumer revenue, which includes e-commerce sales, offered a glimmer of good news within the retailer’s otherwise mediocre second quarter earnings.
Under Armour’s direct-to-consumer revenue grew 20% year over year to $386 million during the second quarter ended June 30, and represented 35% of global revenue.
Direct-to-consumer revenue includes Under Armour’s e-commerce sales and revenue from the manufacturer’s 268 stores, which includes 205 factory outlets and 63 branded retail stores, and revenue increased this quarter in each segment, Dave Bergman, Under Armour’s chief financial officer told analysts on an earnings call according to a Seeking Alpha transcript. Under Armour does not break out e-commerce sales.
“North America e-comm did pretty well in Q2,” Bergman said.
However, Under Armour, No. 36 in the Internet Retailer 2017 Top 500, also took a $12.3 million loss this quarter, and its North American revenue only increased 0.3%.
Under Armour also announced a restructuring plan that would eliminate about 2% of its workforce, which is 280 jobs globally, and cut its annual sales forecast. Under Armour has roughly 15,000 employees.
“We are streamlining all aspects of our organization to improve our business operations and deliver against our long-term strategic goals,” an Under Armour spokeswoman says. “As a part of this new alignment, a workforce reduction will impact approximately 2% of our global workforce.”
CEO Kevin Plank also reported that it recently opened its new headquarters in Portland, Ore., moving them from Baltimore. The Portland area is also where competitor Nike Inc. (No. 37) has its headquarters. Plank said the retailer is using the new location to “tap into the talent pool that exists there.”
- $1.088 billion in net revenue, a 8.7% increase from $1.001 billion in Q2 2016.
- North American revenue of $829.8 million, a 0.3% increase from $827.1 million.
- Net loss of $12.3 million compared with a $6.3 million gain.
- Connected Fitness revenue of $22.97 million, a 2.2% decrease from $23.50 million.
For the first six months:
- $2.205 billion in net revenue, a 7.7% increase from $2.048 billion the first six months of 2016.
- North American revenue of $1.701 billion, a 0.4% decrease from $1.708 billion.
- Net loss of $14.6 million compared with a $33.5 million loss.
- Connected Fitness revenue of $41.9 million, a 0.2% decrease from $42.0 million.