in the second quarter, with the Baltimore-based sports brand posting better-than-expected earnings but lowering its sales guidance for the year as business in North America continues to trend down.reported net income of $109.6 million, or 24 cents a share, up from $86.9 million, or 19 cents a share, in the prior year. Sales were flat year-over-year, coming in at $1.567 billion, down marginally from $1.574 billion a year ago.
In the quarter, wholesale revenue decreased 1 percent to $840 million, while direct-to-consumer sales increased 3 percent to $596 million led by e-commerce, which represented 35 percent of DTC sales in the quarter. Revenue at the company’s owned and operated stores was down 4 percent, however.sales — driven by growth in train and golf product — rose 3 percent to $1.1 billion, while footwear was down 7 percent to $351 million.
On the product end, the company is focusing more on elevated design and product, in footwear, Sportstyle and womenswear, and recently brought John Varvatos on board as chief design officer. “He has quickly added leadership maturity, direction and strength to our design organization, bringing a fresh perspective and helping us elevate our approach to our athletes’ lives outside the gym,” she said.
Linnartz said these events signal a “significant evolution in our approach to marketing, which is much more focused on capitalizing on our assets to generate returns via product marketing rather than simply leaning into large-scale ad campaigns.”