Under Armour revenues slip 3% to $5.7bn in FY24

Under Armour revenues slipped 3% to $5.7bn (£4.5bn) for the financial year ended 31 March. 

North America revenue decreased 8% to $3.5bn (£2.7bn), while international revenue increased 8% to $2.2bn (£1.7bn). Within the international business, revenue increased 9% in EMEA, 6% in Asia-Pacific, and 8% in Latin America.

Wholesale revenue decreased 7% to $3.2bn (£2.5bn) while direct-to-consumer revenue increased 3% to $2.3bn (£1.8bn) due to a 5% increase in owned and operated store revenue and a 1% increase in eCommerce revenue, which represented 41% of the total direct-to-consumer business for the year.

Within the group, apparel revenue decreased 2% to $3.8bn (£3bn), footwear revenue decreased 5% to $1.4bn (£1.1bn), and accessories revenue declined 1% to $406m (£320m).

During the year, operating income reached $230m (£181m). Excluding the company’s litigation reserve expense, adjusted operating income was $310m (£245m).

To strengthen and support the company’s financial and operational efficiencies, Under Armour’s board of directors has approved a restructuring plan. In conjunction with this plan, the company expects to incur total estimated pre-tax restructuring and related charges of approximately $70m to $90m (£55m to £71m).

Under Armour president and CEO Kevin Plank said: “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.

“Over 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. In parallel, we’re focused on cost management and implementing the strategies necessary to grow our brand and improve shareholder value as we move forward.”

For 2025, the company now expects revenue  to be down at a low-double-digit percentage rate, including an expected 15 to 17% decline in North America as the company works to “meaningfully reset” this business and a low-single-digit percent decline in its international business due to more conservative macro consumer trends and actions to protect the brand strength it has built.

Operating income is expected to be $50m to $70m (£39m to £55m). Excluding the mid-point of anticipated restructuring charges, adjusted operating income is expected to be $130m to $150m (£102m to £118m).

Plank said: “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. We also maintained a strong balance sheet, closing the year with a solid cash position and healthy inventory levels.”