Is the company's turnaround plan actually working?Shares of athletic apparel company Under Armour (UA 18.64%) (UAA 19.32%) raced higher on Thursday after the company pleasantly surprised investors with its financial report for its fiscal first quarter of 2025. As of 11:30 a.m. ET, both share classes of Under Armour stock were up more than 17%.A plan to turn around the brandIn October 2019, Under Armour founder Kevin Plank stepped down as its CEO. The stock has drifted about 70% lower since then. The company ...

Core Viewpoint - Under Armour reported a significant decline in quarterly sales and adjusted its full-year profit guidance after settling a long-standing securities lawsuit for $434 million, although it exceeded Wall Street expectations for earnings and revenue [1][2]. Financial Performance - Quarterly sales fell to $1.18 billion, down approximately 10% from $1.32 billion a year earlier [2]. - The company reported a loss of $305.4 million, or 70 cents per share, compared to a profit of $10 million, or 2 cents per share, a year earlier [1]. - Adjusted earnings per share were 1 cent, beating the expected loss of 8 cents, while revenue surpassed expectations of $1.15 billion [1]. Lawsuit Settlement - Under Armour settled a securities lawsuit for $434 million, which accused the company of defrauding shareholders regarding revenue growth [2]. - The settlement will be paid using cash from its revolving credit facility, and the company did not admit fault or wrongdoing [2]. Future Guidance - The company now expects to incur losses in fiscal 2025, forecasting losses per share between 53 cents and 56 cents, and adjusted earnings per share between 19 cents and 22 cents [2][3]. - Previously, Under Armour anticipated full-year earnings of 2 cents to 5 cents per share and adjusted earnings between 18 cents and 21 cents per share [3]. Restructuring Efforts - Under Armour is undergoing a broad restructuring plan to regain market relevance, reverse sales decline, and boost profits, including layoffs and reduced promotions [3]. - The company aims to position itself as a premium brand, taking inspiration from Nike's strategy [3]. Sales Breakdown - In North America, sales dropped 14% to $709 million, better than the expected $669.1 million [4]. - Wholesale revenue decreased by 8% to $681 million, while direct-to-consumer sales fell 12% to $480 million [4]. - Online sales plummeted 25%, attributed to planned decreases in promotional activities [4]. Product Revenue Trends - Apparel revenue fell 8%, footwear sales dropped 15%, and accessories revenue slid 5% [4]. Strategic Acquisitions - Under Armour announced the acquisition of sustainable fashion brand Unless Collective, aiming to enhance its brand strategy and expand into sustainable fashion [4][5]. - Eric Liedtke, the founder of Unless Collective, will join Under Armour as executive vice president of brand strategy [5].

Exhibit 99.1 UNDER ARMOUR REPORTS FIRST QUARTER 2025 RESULTS; UPDATES FISCAL 2025 OUTLOOK BALTIMORE, Aug. 8, 2024 – Under Armour, Inc. (NYSE: UA, UAA) announced unaudited financial results for its first quarter fiscal 2025, which ended June 30, 2024. The company reports its financial performance following accounting principles generally accepted in the United States of America ("GAAP"). This press release refers to "currency neutral" and "adjusted" amounts, which are non-GAAP financial measures described be ...

Core Insights - Under Armour, Inc. has announced the acquisition of UNLESS COLLECTIVE, INC, a zero-plastic regenerative fashion brand, with Eric Liedtke joining as Executive Vice President of Brand Strategy following the completion of the acquisition [1][2][3] Company Overview - Under Armour is a leading inventor, marketer, and distributor of branded athletic performance apparel, footwear, and accessories, headquartered in Baltimore, Maryland [7] - The company aims to empower human performance through innovative products and experiences designed to enhance athletic capabilities [7] Leadership Changes - Eric Liedtke, with a 26-year career at adidas Group, will oversee Under Armour's brand identity, strategic planning, and transformational initiatives to accelerate growth while continuing to lead UNLESS [1][2][3] - Liedtke is recognized for his exceptional leadership and consumer-centric growth strategies, having previously orchestrated significant revenue growth at adidas [4][3] Strategic Goals - Under Armour aims to refine its operating model and enhance consumer engagement through Liedtke's leadership, focusing on brand storytelling and loyalty [2][3] - The company sees potential for growth among new and existing consumers by elevating its brand and redefining its narrative [3][4] UNLESS COLLECTIVE, INC Overview - UNLESS is the world's first all-plant, zero-plastic regenerative fashion brand, focusing on sustainable clothing and apparel that can be safely returned to the environment [5][6] - The brand is a collaboration of innovators and activists working towards a plastic-free future through plant-based innovation [5][6]

BALTIMORE, July 24, 2024 /PRNewswire/ -- Under Armour, Inc. (NYSE: UA, UAA) plans to release its first quarter fiscal 2025 (ended June 30, 2024) results on August 8, 2024. Following the news release at approximately 7:00 a.m. Eastern Time (ET), Under Armour management will host a conference call at approximately 8:30 a.m. ET to review results. This call will be webcast live and archived at https://about.underarmour.com/investor-relations/financials. About Under Armour, Inc. Under Armour, Inc., headquartered ...

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Core Viewpoint - Under Armour is currently experiencing a significant downturn in stock price and sales, with a restructuring plan aimed at repositioning the brand towards a premium market status, which could present a potential investment opportunity as valuations are at historic lows [5][7][17]. Business Overview - Under Armour's wholesale sales accounted for approximately 56% of total business in FY 2024, with apparel making up 65% of sales, shoes 24%, and accessories 11% [4]. - The company operates 1,900 physical stores across 100 countries, with North America representing 61% of sales [4]. Financial Performance - The stock price fell below $7 in June 2024, marking the lowest valuation since its IPO, with management downgrading expectations and anticipating $70-90 million in restructuring charges [5][11]. - Despite projected revenue contraction, a gross margin improvement of 75 to 100 basis points is expected due to reduced discounting activities [10]. Restructuring Efforts - Kevin Plank has returned as CEO to lead a restructuring plan that focuses on enhancing brand image and reducing reliance on discount sales through wholesale channels [7][8]. - The strategy includes selling higher-priced exclusive products and reducing discounted merchandise to wholesale clients, similar to Lululemon's approach [8]. Valuation Metrics - Under Armour's current valuation metrics, such as 0.53x price to trailing sales and 1.75x tangible book value, reflect a 75% to 80% discount to long-term averages [17]. - The enterprise value to revenues is at 0.48x, and EV to EBITDA is at 7.3x, both near historic lows for the company [20][24]. Cash Flow and Financial Health - The company reported $858 million in cash against $676 million in financial debt, indicating a strong balance sheet [11]. - A free cash flow yield of 6.76% is noted, providing room for financing the turnaround without additional debt [27]. Market Sentiment and Technical Analysis - Investor sentiment has reached a low point, with a significant short position indicating bearish expectations for FY 2025 [5][6]. - Recent trading patterns suggest a potential stabilization in stock price, with indicators showing improved supply and demand dynamics [29]. Future Outlook - The restructuring efforts are expected to take 12-18 months to yield results, with potential for significant price appreciation if the turnaround is successful [34]. - Analysts project a return to typical sales and margins by the end of FY 2026, assuming no major economic downturn occurs [11].

Financial Performance - The Company reported a consolidated net revenue of $1,199.1 million as of March 31, 2024, with contract maturities ranging from one to twenty-four months [201]. - The Company's total net revenue for the year ended March 31, 2024, was $5.7 billion, a decrease from $5.9 billion for the year ended March 31, 2023, representing a decline of approximately 3.4% [216]. - Net income for the year ended March 31, 2024, was $232,042, a decrease of 38% compared to $374,459 for the year ended March 31, 2023 [231]. - The Company reported a basic net income per share of $0.53 for the year ended March 31, 2024, down from $0.83 in the previous year, a decrease of about 36% [224]. - The Company reported net revenues of $5,701,879 for the three months ended March 31, 2024, compared to $5,903,165 for the same period in 2023 [353]. - The Company reported a net income (loss) of $(0.3) million from its Japanese licensee for Fiscal 2024, an improvement from $(2.5) million in Fiscal 2023 [276]. Expenses and Costs - Gross profit for the year ended March 31, 2024, was $2.63 billion, compared to $2.64 billion for the previous year, indicating a slight decrease of about 0.5% [224]. - Selling, general and administrative expenses increased to $2.4 billion for the year ended March 31, 2024, compared to $2.38 billion in the previous year, marking an increase of about 5.1% [224]. - The Company reported depreciation and amortization expenses of $142,590, an increase of 5% from $135,456 in the previous year [231]. - Advertising expenses for Fiscal 2024 amounted to $568.5 million, a decrease from $620.3 million in Fiscal 2023 [272]. - The Company recorded a 401(k) Deferred Compensation Plan expense of $10.6 million for Fiscal 2024, down from $11.6 million in Fiscal 2023 [333]. Assets and Liabilities - The Company had total assets of $4.76 billion as of March 31, 2024, a slight decrease from $4.82 billion as of March 31, 2023 [221]. - Total liabilities amounted to $2.61 billion as of March 31, 2024, compared to $2.86 billion in the previous year, indicating a reduction of approximately 8.7% [221]. - The Company’s total goodwill as of March 31, 2024, is $478.3 million, a decrease from $481.99 million as of March 31, 2023, primarily due to currency translation adjustments [298]. - The total liability for unrecognized tax benefits as of March 31, 2024, was approximately $79.9 million, including $15.0 million for the accrual of interest and penalties [368]. Cash Flow and Financing - Cash flows from operating activities provided $353,970, a significant recovery from a cash outflow of $39,886 in the previous year [231]. - Total cash, cash equivalents, and restricted cash at the end of the period was $876,917, up from $726,745 a year earlier, reflecting a net increase of $150,172 [234]. - The Company incurred and deferred $5.4 million in financing costs related to the Senior Notes [312]. - The Company has approximately $80.9 million aggregate principal amount of 1.50% convertible senior notes due 2024, with a fixed interest rate of 1.50% per annum [309]. Risk Management - The company is exposed to inflationary pressures that may adversely affect operating results, particularly in product input costs and consumer discretionary spending [204]. - The company is subject to risks related to foreign currency exchange rate fluctuations, which could impact financial condition and results of operations [201]. - The allowance for doubtful accounts is deemed sufficient to cover customer credit risks as of March 31, 2024 [203]. - The Company has maintained its commitment to effective internal control over financial reporting, although challenges remain due to identified weaknesses [213]. Legal and Regulatory Matters - The Company is involved in ongoing litigation related to securities and derivative actions, which could have material implications for its financial position [320]. - The Company has accrued $100 million for legal proceeding contingencies as of March 31, 2024, with potential losses expected to exceed this amount [323]. - The Company expects a portion of potential legal losses to be covered by insurance, although the recorded accrual currently exceeds available insurance coverage [323]. Future Outlook - Future outlook suggests continued focus on market expansion and new product development to drive revenue growth [381]. - The restructuring plan approved by the Board of Directors aims to improve profitability and cash flow, with estimated pre-tax charges of approximately $70 million to $90 million during Fiscal 2025 [384]. - The company plans to enhance operational efficiency to improve profit margins in the upcoming quarters [381].

Under Armour Inc. is initiating a restructuring plan to turn around its mounting losses.  Founder Kevin Plank, who was brought back as CEO last month after stepping down at the end of 2019, told analysts that he is working on cost management and implementing necessary strategies to grow the brand. This includes an undisclosed number of layoffs. The company said it plans to take a charge of between $7 million and $15 million in employee severance and benefits costs. FOX Business reached out to Under Armour f ...

Key PointsUnder Armor's stock stabilized after a 15% decline, showing investors its proper fundamentals are still solid today.Expected to grow its EPS above peers and beat inflation, analysts see a double-digit upside in price targets.Under Armour stock trades at a discount to the sector despite a better positioning.5 stocks we like better than Alibaba GroupAfter shares of Under Armour Inc. NYSE: UA plummeted by 15% in the pre-market session of Thursday morning due to the company’s release of its first quar ...