What happened
Shares of sporting goods and casual apparel maker Under Armour (UA 1.73%) (UAA 1.81%) fell hard in May. According to data from S&P Global Market Intelligence, Under Armour's Class A shares fell 16% and the Class C shares lost 15.2%. A disappointing first-quarter report pulled the two stocks more than 20% lower in a three-day span.
So what
The company 's bottom line swung from earnings of $0.05 per share to an adjusted net loss of $0.34 per share. Analysts had been expecting a $0.16 loss per share. Under Armour's revenue fell 22% to $930 million. Here, your average Wall Street firm had been expecting sales near $958 million.
Under Armour expects to reduce its full-year operating expenses by $325 million through a variety of cost-saving initiatives. These include temporary layoffs, limited advertising and marketing activities, tighter hiring processes, and lower travel expenses.
Image source: Getty Images.
Now what
Under Armour's stocks ended May on a brighter note as the company started to open up approximately half of its retail stores. The momentum continued in early June thanks to continued reopening efforts and a generally brighter economic picture. Both of Under Armour's stock classes are now trading higher than they were at the end of April. I would take this sudden recovery with a bucket of salt, since the early return to business as usual seems likely to trigger another round of coronavirus infections. This bounce might be short-lived.
