Under Armour faces declining revenues as restructuring plans are implemented, impacting several key areas.
- The company has reported an operating loss of $300 million (£235 million) in its first fiscal quarter of 2025.
- North American and direct-to-consumer sales decreased significantly, contributing to the overall decline.
- Revenue dropped by 10% year on year, affecting various segments including apparel, footwear, and accessories.
- Restructuring efforts, including a comprehensive fiscal review, aim to revitalise the brand and improve efficiency.
Under Armour, a leading US sportswear brand, experienced a substantial operating loss of $300 million (£235 million) in the first quarter of fiscal 2025, ending on 30 June 2024. This downturn coincides with ongoing restructuring efforts intended to streamline operations and enhance the brand’s market position. These losses reflect a broader decline in sales across several regions and channels.
Revenue contracted by 10% compared to the previous year, amounting to $1.2 billion (£940 million). A noteworthy impact was felt in North American sales, which fell by 14% to $709 million (£555 million). Internationally, revenue saw a reduction of 2%, bringing in $473 million (£370 million). Wholesale revenue experienced an 8% decline to $68 million (£53 million), and direct-to-consumer sales dropped by 12% to $480 million (£376 million).
The brand’s core product categories also reported downturns. Apparel revenue decreased by 8% to $758 million (£594 million), footwear revenue plummeted by 15% to $31 million (£24 million), and accessories dropped by 5% to $9 million (£7 million). These declines suggest a challenging retail environment and necessitate strategic adjustments to regain market traction.
In response to financial pressures, Under Armour disclosed a restructuring plan in May, which includes potential job cuts. The plan, valued between $70 million (£55 million) and $90 million (£71 million), has led to the recognition of $25 million (£19 million) in restructuring and impairment charges, along with $9 million (£7 million) in other transformational expenses. Under Armour has projected further charges as the plan progresses through fiscal 2025.
Kevin Plank, returning as CEO, underscored early successes in repositioning the brand, achieving results that exceeded initial expectations. He stressed the importance of premium brand positioning and operational efficiency. “We are encouraged by early progress in our efforts to reconstitute a premium positioning for the Under Armour brand and pleased with our first quarter fiscal 2025 results that were ahead of expectations,” Plank stated. Continued innovation and alignment with consumer preferences are crucial for future success.
Under Armour is committed to transforming its brand and operational strategy amidst financial challenges.
