Under Armour(UAA) - 2025 Q3 - Quarterly Report

Revenue Performance - Total net revenues decreased by 5.7% compared to the same period last year[175] - Wholesale revenue decreased by 1.0%, while direct-to-consumer revenue decreased by 9.1%[175] - Apparel revenue decreased by 5.0%, footwear revenue decreased by 9.0%, and accessories revenue increased by 5.7%[175] - Net revenues decreased by $85.0 million, or 5.7$1,401.0 million for the three months ended December 31, 2024, compared to $1,486.0 million for the same period in 2023[183] - For the nine months ended December 31, 2024, net revenues decreased by$385.9 million, or 8.8%, to $3,983.7 million compared to$4,369.7 million in the same period in 2023[183] - Total net revenues decreased by $385.96 million, or 8.8$3,983.73 million for the nine months ended December 31, 2024, compared to $4,369.68 million in 2023[217] - The decrease in net sales was attributed to both wholesale and direct-to-consumer channels[185] - North America net revenue decreased by 7.8$71.7 million, or 7.8%, to $843.6 million, attributed to declines in both direct-to-consumer and licensing revenues[215] - EMEA region net revenues increased by$13.8 million, or 4.9%, to $297.9 million, supported by growth in both wholesale and direct-to-consumer channels[215] - Asia-Pacific net revenues decreased by$55.71 million, or 8.6%, to $590.61 million, impacted by lower sales in both wholesale and direct-to-consumer channels[220] Financial Metrics - Gross margin increased by 240 basis points to 47.5$5.5 million to $665.2 million during the three months ended December 31, 2024, with a gross margin increase to 47.5$106.7 million to $1,924.0 million, with a gross margin increase to 48.3$57.9 million, or 81.1%, to $13.5 million for the three months ended December 31, 2024, compared to the same period in 2023[216] - Other expense, net increased by$50.5 million to $2.6 million during the three months ended December 31, 2024, primarily due to an earn-out related to the sale of MyFitnessPal[206] - Income tax expense decreased by$2.3 million to $6.3 million for the three months ended December 31, 2024, with an effective tax rate of 83.3$38.5 million, or 6.4%, to $637.7 million for the three months ended December 31, 2024, as a percentage of net revenues increased to 45.5$197.5 million, or 11.0%, during the nine months ended December 31, 2024, with a percentage of net revenues rising to 50.1% from 41.1%[197] - License revenues decreased by $5.2 million, or 17.8$23.9 million during the three months ended December 31, 2024, primarily due to lower revenues from licensing partners in North America[186] - Marketing costs decreased by $31.1 million, or 7.1$228.6 million, or 16.8%, primarily due to higher litigation expenses and an impairment charge of $28.4 million[202] - Interest expense, net increased by$3.2 million to $3.4 million during the three months ended December 31, 2024, primarily due to a decrease in interest income[203] Restructuring and Future Plans - The 2025 restructuring plan was approved with an estimated total cost of$140 million to $160 million[176] - Total costs recorded in restructuring charges for the three months ended December 31, 2024, amounted to$17.764 million[176] - Up to $75 million in cash-related charges are anticipated as part of the restructuring plan, including$30 million in employee severance costs[179] - Restructuring charges increased by $13.9 million, or 100.0$13.9 million for the three months ended December 31, 2024, compared to the same period in 2023, primarily due to employee-related, facility-related, and other restructuring charges[199] - The company expects trends in gross margin improvements to continue through the remainder of Fiscal 2025, albeit to a lesser extent[192] Cash Flow and Capital Expenditures - Net cash provided by operating activities decreased by $334.0 million to$142.9 million for the nine months ended December 31, 2024, compared to $476.9 million in 2023[233] - Cash flows used in investing activities increased by$27.7 million to $(99.2) million, primarily due to higher capital expenditures and acquisitions[235] - Total capital expenditures for the nine months ended December 31, 2024, were$139.9 million, representing approximately 4% of net revenues, an increase of $23.3 million from$116.5 million in 2023[236] - Cash flows used in financing activities increased by $79.5 million to$(154.5) million, including $80.9 million for repaying Convertible Senior Notes and$65.0 million for share repurchases[237] Liquidity and Financing - As of December 31, 2024, the company had approximately $726.9 million in cash and cash equivalents, sufficient to meet liquidity needs for at least the next twelve months[224] - The company authorized a share repurchase program of up to$500 million, with $65 million already repurchased as of December 31, 2024[229][232] - The company plans to continue reinvesting its non-U.S. subsidiaries' cumulative undistributed earnings of$1.5 billion to fund international growth and operations[226] - The company has a revolving credit facility of $1.1 billion, with no amounts outstanding as of December 31, 2024[238] - As of December 31, 2024,$45.9 million of letters of credit were outstanding under the amended credit agreement[240] - The company repaid $80.9 million of Convertible Senior Notes upon maturity on June 1, 2024, using cash on hand[246] - The company issued$600.0 million of 3.25% senior unsecured notes due June 15, 2026, with interest payable semi-annually[247] - The amended credit agreement requires maintaining a consolidated EBITDA to consolidated interest expense ratio of not less than 3.50 to 1.0[243] - The company incurred capital expenditures of $88.5 million related to the construction of its new global headquarters, designed with sustainability features[236]