Under Armour is experiencing a significant downturn due to a restructuring plan.
- Sales have dropped across various segments, impacting overall revenue.
- The company has reported a substantial operating loss for the first quarter of fiscal 2025.
- North American and direct-to-consumer sales have notably decreased.
- Founder Kevin Plank has returned as CEO to guide the brand through these challenges.
Under Armour is navigating a challenging period marked by a 10% decrease in year-on-year revenue, amounting to $1.2 billion for the quarter ending June 30, 2024. This downturn is part of a broader restructuring plan aimed at revitalizing the brand’s market presence.
The North American market, a significant revenue stream for Under Armour, experienced a 14% decrease, bringing in $709 million. Meanwhile, international sales saw a modest decline of 2%, totaling $473 million. The direct-to-consumer avenue also faced a decline, with revenues down by 12% to $480 million. Wholesale revenue was not immune, as it decreased by 8% to $68 million.
Product categories similarly reflected this downturn. Apparel sales dropped by 8%, totaling $758 million, while footwear revenues experienced a sharper decline of 15%, amounting to $31 million. Accessories sales fell by 5%, totaling $9 million.
The fiscal challenges are compounded by the costs associated with the restructuring plan, yet Under Armour reported $8 million in adjusted operating income when excluding transformation expenses and other charges totaling $308 million. Previously announced in May, the restructuring plan will incur costs ranging from $70 million to $90 million, with $25 million already recognized in charges and $9 million in related expenses.
Founder Kevin Plank, resuming the role of CEO in May, emphasized the company’s strategic efforts to reset and elevate the brand. While the initial results of fiscal 2025 exceeded expectations, Plank noted, “Our renewed energy and alignment are proving to be critical enablers as we work to deliver superior products and storytelling while driving efficiencies and reducing complexities.” He further highlighted the focus on strengthening the product lineup and brand leadership to regain consumer trust.
Looking forward, Under Armour has adjusted its fiscal expectations, projecting a low double-digit percentage decline in revenue for 2025. This includes anticipated reductions in North American sales, which are expected to fall by 14% to 16% as the company strives to ‘reset this business meaningfully.’
Under Armour is facing significant challenges as it implements a restructuring plan to regain its market footing.
