Key Takeaways
- Under Armour’s fourth-quarter profit missed estimates, with CEO Kevin Plank attributing the quarter to a “challenging retail environment.”
- The apparel maker announced a fiscal 2025 restructuring plan that could cause up to $90 million in costs through layoffs and other methods.
- The company’s board also approved a stock buyback plan, allowing Under Armour to repurchase $500 million of its own shares over the next three years.
Under Armour (UAA) on Thursday reported fourth-quarter profit that fell well short of analyst estimates, with Chief Executive Officer (CEO) Kevin Plank saying the company faced a “challenging retail environment” over the last fiscal year.
The sportswear brand also announced a fiscal 2025 restructuring plan that would incur charges of about $70 million to $90 million and include layoffs.
Shares of the company initially fell in premarket trading but pared those losses and by 11:48 a.m. ET Thursday were trading 1% higher at $6.87.
Q4 Income Below Forecasts, Guides 2025 Sales Drop
The company said its fourth-quarter sales were $1.33 billion, in line with analyst estimates compiled by Visible Alpha. However, net income of $6.6 million, or 2 cents per share, was well below the $33.4 million and 7 cents per share analysts expected.
Revenue during the quarter in North America fell 10% year-over-year to $772 million, but that change was partially offset by 7% growth in international sales to $561 million.
Under Armour also projected fiscal 2025 revenue would fall by a “low-double-digit percentage rate,” which includes a 15%-17% decline in North America.
Diluted earnings per share (EPS) for the full year is expected to be just 2 cents to 5 cents, well below the 59 cents per share analysts were projecting.
“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,” said Plank, who founded the company and returned as CEO early last month.
Restructuring Plans, $500M Stock Buyback
Under Armour said its board approved the restructuring plan to “strengthen and support the company’s financial and operational efficiencies.”
The company’s board also approved a $500 million buyback of the company’s Class C common stock. The buyback will be undertaken over the next three years.