Under Armour unveils restructuring plan as Q4 earnings plunge

Under Armour Inc. ended its fiscal year on a sour note as its earnings fell more than 96% with sales continuing to fall in its home — and biggest — market.

The athletic apparel retailer also announced a downbeat 2025 outlook and unveiled a broad restructuring plan that includes layoffs. On the company’s earnings call, founder Kevin Plank, who stepped back into the CEO role in March, said the company was doing “too much stuff.”

“There are too many products, too many initiatives, too much of too much,” he said.

Under Armour is eliminating products that don’t meet its standards, Plank told analysts, with a goal of cutting its SKU count by 25% during the next 18 months. The company is also planning to cut down on promotions and discounting, 

Under Armour reported net income of $6.6 million, or $0.02 per share, for the quarter ended March 31, compared with $170.6 million, or $0.38 per share, in the year-ago period. Adjusted earnings came to $0.11 per share. 

Sales fell to $1.33 billion from $1.4 billion a year earlier. In North America, sales were down 10% to $772 million. Under Armour expects revenue to fall double digits in 2025, including an expected drop of 15% to 17% in North America.

“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,” Plank said in a statement. 

On a more optimistic note, Plank noted that during 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.”

At the same time, he said, the company is focused on cost management and implementing the strategies necessary “to grow our brand and improve shareholder value as we move forward."

Restructuring

As part of its restructuring plan, Under Armour expects to incur total estimated pre-tax restructuring and related charges of approximately $70 to $90 million, including: 

• Up to $50 million in cash-related charges, consisting of approximately $15 million in employee severance and benefits costs, and $35 million related to various transformational initiatives, and
• Up to $40 million in non-cash charges comprised of approximately $7 million in employee severance and benefits costs and $33 million in facility, software and other asset-related charges and impairments.