On Friday morning Under Armour (NYSE:UA) (NYSE:UAA) revealed operating results for the second quarter, which captured the deepest impact on the retailing business from COVID-19 shutdowns.

Sales dove 41% as most of its athletic apparel stores were closed to customers for much of the period, the company said. This slump generated an adjusted operating loss of $131 million.

As bad as those headline numbers were, investors were bracing for even bigger sales and profit declines.

A jogger laces up their shoes.

Image source: Getty Images.

Under Armour notched some wins in the period, including by boosting e-commerce sales and bulking up its cash holdings. But the chain still risks some major pricing pressures over the next few quarters as it works through elevated inventory in a potentially shrinking market. Inventory holdings jumped 24%, in fact, to $1.2 billion after having risen 7% in the previous quarter.

"We remain appropriately cautious," CEO Patrik Frisk said in a press release, "due to continued uncertainty related to consumer shopping dynamics, the potential for a highly promotional environment, and proactive decisions to reduce inventory." Under Armour declined to issue a new outlook for the year but noted that it expects customer retailing traffic to remain lower for the rest of 2020.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.