Under Armor stores are reopening across the county after being forced to close due to the Covid 19 crisis, but according to the retailer's CEO, shoppers are no longer appearing as before.
"The consumer is there, but he's still far from pre-Covid … there's hesitation there," Patrik Frisk, chief executive of Under Armor, told Sara Eisen of CNBC Friday morning shortly after the company's second quarter earnings report.
"The consumer is out there shopping, and when he's shopping, the switch is better," he said. "But traffic is still depressed … we believe that this kind of tentative approach by the consumer will persist."
Under Armor shares fell more than 8% on Friday afternoon after management announced during a call for earnings that the company was forecasting a 20% to 25% drop in sales in the second half of the year. During this period, the declines in the fourth quarter, including the major holiday season, could be worse. And it also warned that gross margins for 2020 could decrease year over year due to increased advertising activity.
"We see the second half of the year as more conservative," said Frisk on CNBC.
"We don't know how consumers will navigate in the second half of this year … how school starts," he said.
Under Armor is not the only one to travel to such unknown areas in retail. Analysts say that the back to school and Christmas business season this year could not be compared to anything that these companies have ever experienced, making planning in-store and online demand much more difficult.
Few retailers have given Wall Street an outlook for 2020, as some have mentioned that they are preparing for a possible second wave of Covid 19 cases in the U.S.