While Umbro has continued to perform in line with managements expectations internationally, sales in the U.K. market continue to be heavily promotional and challenging. As a result, the company issued an earnings warning stating that full-year results are expected to be “marginally below” the boards expectations at the end of the first half.
U.K. sales are still expected to grow 20% for the year, almost entirely due to licensed sales in the first half of the year, fueled by the World Cup. Umbro has managed to sell all England World Cup team inventory, although sell through has been slow since the tournament has ended. Non-licensed sales in the U.S. have declined on a YTD basis.
Management stated that the U.K. market remains “extremely tough and price led” and the companys ability to maintain margins is “coming under increasing pressure.”
Year-to-date international sales are 14% above last year with Umbros China licensee leading the expansion. Umbro expects to have 935 doors opened in China by the end of the year and has seen sales grow 50% year-to-date.
U.S. sales are reportedly below expectations, coming in flat to last year. However, soccer specialty sales in the U.S. are ahead of forecasts. Umbros board is counting on the brands partnership with Dicks Sporting Goods to spur growth going forward.
