Under Armour announces restructuring plan after revenues slip

Under Armour's revenues and profit dips for the fourth quarter and full-year fiscal 2024, ending 31 March 2024. This was due to a "lower wholesale channel demand and inconsistent execution across [the] business".

Fourth quarter results were as follows:

• Revenue was down 5% to £1 billion ($1.3 billion). However, it increased by 10% in the EMEA region.
• Wholesale revenue decreased by 7% to £671 million ($850 million) and direct-to-consumer revenue was flat at £359 million ($455 million).
• Store revenue increased by 7% and e-commerce revenue decreased by 8%.
• Apparel revenue decreased by 1% to £693 million ($877 million), footwear revenue was down 11% to £267 million ($338 million) and accessories revenue was down 7% to £70 million ($89 million).
• Net Income was £5.5 million ($7 million).
• Diluted earnings per share was £0.01 ($0.02).

Fiscal 2024 results were as follows:

• Revenue was down 3% to £4.5 billion ($5.7 billion). However, revenue increased by 9% in the EMEA region.
• Wholesale revenue decreased by 7% to £2.5 billion ($3.2 billion) and direct-to-consumer revenue increased by 3% to £1.8 billion ($2.3 billion).
• Apparel revenue decreased by 2% to £3 billion ($3.8 billion), footwear revenue decreased by 5% to  £1.1 billion ($1.4 billion) and accessories revenue declined by 1% to £320 million ($406 million).
• Operating income was £181 million ($230 million).
• Net Income was £183 million ($232 million).
• Diluted earnings per share was £0.41 ($0.52).

Under Armour President and CEO, Kevin Plank, said: "Amid a challenging retail environment in fiscal 2024 that included high inventories and a consistent drumbeat of promotions – we demonstrated disciplined expense control and delivered results that were aligned with our previous outlook."

Looking ahead, to strengthen and support the company's financial and operational efficiencies, Under Armour's Board of Directors has approved a restructuring plan.

For fiscal 2025, the company expects revenues to be down at a low-double-digit percentage rate. Gross margin is expected to be up 75 to 100 basis points compared to the prior year, driven by discounting activities in the company's direct-to-consumer business. Operating income is expected to sit between £39 and £55 million ($50 and $70 million).

Plank continued: "Due to a confluence of factors, including lower wholesale channel demand and inconsistent execution across our business, we are seizing this critical moment to make proactive decisions to build a premium positioning for our brand, which will pressure our top and bottom line in the near term.

"Over the next 18 months, there is a significant opportunity to reconstitute Under Armour's brand strength through achieving more, by doing less and focusing on our core fundamentals: driving demand through better products and storytelling, running smarter plays like simplifying our operating model and elevating our consumer experience. In parallel, we're focused on cost management and implementing the strategies necessary to grow our brand and improve shareholder value as we move forward."