Under Armour’s stores are opening back up across the county after being forced shut 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 they are still nowhere near pre-Covid levels … there is hesitancy there,” Under Armour Chief Executive Patrik Frisk told CNBC’s Sara Eisen on Friday morning, on the heels of the company’s second-quarter earnings report.
“The consumer is out there shopping, and when they do shop conversion is better,” he said. “But the traffic is still depressed. … We think that kind of tentative approach from the consumer is going to stay.”
Under Armour shares were falling more than 7% Friday morning, after management said during an earnings call that the company is forecasting revenue to be down between 20% and 25% in the back half of the year. Within that time frame, it said declines could be worse during the fourth quarter, which includes the all-important holiday season. And it also warned 2020 gross margins could end the year down on a year-over-year basis, due to heightened promotional activity.
“We are taking a more conservative outlook around the back half of the year,” Frisk said on CNBC.
“We don’t know how the consumer is going to be navigating the back half of this year … how back-to-school is going to play out,” he said.
Under Armour isn’t alone in navigating such uncharted territories in the retail industry. Analysts say the back-to-school and holiday shopping seasons this year could be like nothing these companies have ever experienced before, making planning for demand both in stores and online much more difficult.
Few retailers have offered Wall Street a 2020 outlook, as some have already mentioned preparing for a potential second wave of Covid-19 cases spiking in the U.S.