Under Armour: sales decline, restructuring in sight
May 16, 2024 at 10:45 am EDT
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On Thursday, Under Armour announced the launch of a restructuring plan designed to reduce costs, as the group predicts a further contraction in sales for the 2024/2025 financial year.
The American sports equipment manufacturer warns that the restructuring project, which aims to improve its operational and financial efficiency, will initially result in charges of between $70 and $90 million, notably linked to job cuts.
This announcement comes as the Baltimore-based group saw its sales decline by 5% to $1.3 billion in the 4th quarter of its 2023/2024 financial year, resulting in an operating loss of $4 million.
For the full year, sales were down by 3%, and this downward trend is set to continue into the new fiscal year, with Under Armour forecasting a decline of between 0% and 5%.
Operating profit, expected to be between $50 and $70 million, is also set to fall sharply from the $230 million recorded last year.
Despite the gloomy outlook, the footwear and sporting goods manufacturer plans to launch a new share buyback program of up to $500 million.
Listed on the New York Stock Exchange, UA shares nibbled a little over 1% following these announcements.
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Under Armour, Inc. is a developer, marketer and distributor of branded athletic performance apparel, footwear and accessories. It is engaged in developing, marketing and distributing branded performance apparel, footwear and accessories for men, women and youth. It operates in four geographic segments: North America, comprising the United States and Canada; Europe, the Middle East and Africa (EMEA); Asia-Pacific, and Latin America. It sells its apparel, footwear and accessories in North America through wholesale and direct-to-consumer channels. It sells its apparel, footwear and accessories in EMEA primarily through wholesale customers and independent distributors, along with e-commerce websites and Brand and Factory House stores. It sells its apparel, footwear and accessories products in China, South Korea, Australia, Singapore, Malaysia and Thailand through stores operated by its distribution and wholesale partners, along with e-commerce websites and Brand and Factory House stores.