Under Armour swings to $300m loss amid decline in revenues

Under Armour has reported an operating loss of $300m (£235.0m) for the three months ended 30 June 2024, as its sales dropped across all regions and categories.

The group saw its revenues decline 10% to $1.2bn (£940m). In North America revenue decreased 14% to $709m (£555.5m), and international revenue decreased 2% to $473m (£370.6m).

In regards to its international business, revenue in EMEA was flat. Meanwhile, the brand’s wholesale revenue also decreased 8% to $681m (£533.5m), and direct-to-consumer revenue was down 12% to $480m (£376.0m).

Additionally, Under Armour’s footwear revenue was down 15% to $310m (£242.8m), followed by apparel which saw a 8% decrease to $758m (593.9m). Accessories revenue was also down 5% to $93m (£72.8m).

The group reported an operating income of $8m (£6.27m), excluding transformation expenses and other charges totaling $308m (241.3m).

In May 2024, Under Armour announced a restructuring plan designed to strengthen and support the company’s financial and operational efficiencies. Of the estimated $70m (£54.8m) to $90m (£70.5m) restructuring plan range, the company recognised $25m (£19.5m) of restructuring and impairment charges and $9m (£7.05m) of other related transformational expenses.

The company anticipates the remainder of the charges under the existing restructuring plan to occur during fiscal 2025.

Looking ahead, the group also expects its revenues to be down at a low double-digit percentage rate, operating loss to be $194m (£152m) to $214m (£167.6m) and adjusted operating income to be $140m (£109.6m) to $160m (125.3m) versus the previous expectation of $130m (£101.8m) to $150m (£117.5m).

Kevin Plank, Under Armour president and CEO, said: “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.

“Our renewed energy and alignment are proving to be critical enablers as we work to deliver superior products and storytelling while driving efficiencies, reducing promotional activity, and complexity.”

He added: “With the strongest product organisation we’ve had in many years and strengthened brand leadership, we’re confident in our ability to elevate our design and innovation over the coming seasons and amplify our unique connection with athletes as their brand of choice.”