Under Armour has reported a significant operating loss in the first quarter of fiscal 2025, as sales experience a downturn.
- The company’s North American and direct-to-consumer sales have seen notable declines, impacting overall performance.
- Wholesale and apparel revenues have been negatively hit, with numbers dropping by substantial margins.
- Footwear and accessories categories have also reported lower sales, contributing to the financial losses.
- A restructuring plan introduced in May aims to address these challenges and reposition the brand.
Under Armour has announced an operating loss of $300 million (£235 million) for the first quarter of fiscal 2025, concluding on 30 June 2024. This downturn is primarily due to decreased sales in North America and through direct-to-consumer channels. North American revenue fell by 14% to $709 million (£555 million), while overall revenue decreased by 10% to $1.2 billion (£940 million).
The wholesale sector saw an 8% decrease in revenue, amounting to $68 million (£53 million), and direct-to-consumer sales decreased by 12% to $480 million (£376 million). In the apparel segment, revenue dropped by 8% to $758 million (£594 million), with footwear revenue experiencing a significant 15% decline to $31 million (£24 million). Accessories revenues decreased by 5%, reaching $9 million (£7 million).
The firm reported an adjusted operating income of $8 million (£6.3 million), excluding restructuring charges and other expenses totalling $308 million (£241 million). In May, Under Armour outlined a restructuring plan which encompassed potential job cuts, though the specific number of positions affected remains unspecified.
As part of a projected $70 million (£55 million) to $90 million (£71 million) restructuring initiative, Under Armour has recognised $25 million (£19 million) in restructuring and impairment charges along with $9 million (£7 million) of other related costs. The company anticipates that the remaining charges will be realised during the fiscal year 2025.
Under Armour has revised its fiscal expectations for 2025, anticipating a low double-digit percentage decline in revenue, with North American sales expected to decrease between 14% to 16%. Kevin Plank, founder and CEO, returned to spearhead the brand’s strategic realignment. He expressed confidence in the company’s trajectory, underscoring progress in resetting the brand’s premium positioning and enhancing efficiencies.
Under Armour is navigating its restructuring plan to mitigate financial losses and bolster its brand positioning amidst challenging market conditions.
