March 24, 2020
Net income decreased 23% to $847 million from $1,101 million in the fiscal third quarter ended Feb. 29 on 5% higher revenues of $10,104 million up from $9,611 million, hurt by February store closures in China to contain the spreading coronavirus.
The Chinese sneaker giant’s net income rose 30% to RMB 5,344.1 million ($753.2 mm) from RMB 4,102.9 million on a 48% jump in sales to RMB 33,927.8 million ($4,782.1 mm) from RMB 24,100.0 million for the FY ended Dec. 31.
Hard and anecdotal data across the country points to firearm and ammo sales surging through February and March in the reaction to the coronavirus situation, as some police departments reduce non-emergency call responses.
Net income improved 54% to $95,918,000 from $62,226,000 for the FY ended Dec. 31 despite a sales drop of 3% to $1,544,830,000 from $1,588,583,000 as the high end sneaker factory continued to build capacity outside of China to handle a strong sports fashion business while prioritizing margin over volume in its women’s fashion and casual businesses.
Adjusted net income increased 24% to R$197 million ($38.4 mm) in the fourth quarter, but was up just 14% to R$135 million including discontinued operations, while revenues grew 6% to R$1,142.7 million ($222.8 mm) for the period.
The Brazilian shoemaker and UA licensee will make five new models of Under Armour shoes alongside its Olympikus, Azaleia and Dijean brands in two main factories that it expanded last year to over 1.3 million sq. ft.
With its liquidating sales forced to close by the spread of Covid-19, the bankrupt retailer asked for a 60-day suspension in the case, during which it would “mothball” its stores and hopefully preserve as much value as possible for delayed GOB sales.
The ratings agency downgraded CWGS’ corporate family rating to B3, probability of default rating to B3-PD, and its senior secured bank credit facility to B3, with a negative outlook.
Deckers is keeping its Moreno Valley, CA, distribution center operating with limited capacity by implementing social distancing procedures and other safety protocols.