Under Armour(US:UA)2025-11-06 21:28Revenue Performance - Total net revenues decreased by 4.7% compared to the same period last year[174] - Wholesale revenue decreased by 6.2%, while direct-to-consumer revenue decreased by 2.2%[174] - Apparel revenue decreased by 1.1%, footwear revenue decreased by 15.7%, and accessories revenue decreased by 2.8%[174] - Net revenues for the three months ended September 30, 2025, decreased by $65.6 million, or 4.7%, to $1.33 billion compared to $1.40 billion in the same period of 2024[180] - Net sales decreased by $63.1 million, or 4.6%, to $1.31 billion during the three months ended September 30, 2025, primarily due to lower average selling prices and unfavorable channel mix[181] - For the six months ended September 30, 2025, net revenues decreased by $115.2 million, or 4.5%, to $2.47 billion compared to $2.58 billion in the same period of 2024[180] - Net revenues in North America decreased by $71.8 million or 8.3% during the three months ended September 30, 2025[211] - Net revenues in EMEA increased by $34.5 million or 12.2% during the three months ended September 30, 2025[214] - Net revenues in Asia-Pacific decreased by $28.5 million or 13.7% during the three months ended September 30, 2025[216] - Net revenues in Latin America increased by $6.9 million or 14.6% during the three months ended September 30, 2025[218] - Corporate Other net revenues decreased by $6.7 million during the three months ended September 30, 2025, primarily due to foreign currency hedge losses[220] Profitability and Margins - Gross margin decreased by 250 basis points to 47.3%[174] - Gross profit decreased by $65.5 million to $630.6 million during the three months ended September 30, 2025, with a gross margin decline to 47.3% from 49.8%[187] - Gross profit for the six months ended September 30, 2025, decreased by $81.7 million to $1.18 billion, with a gross margin decline to 47.7% from 48.7%[188] - Estimated negative impact of approximately $100 million to cost of goods sold in Fiscal 2026 due to increased tariffs, affecting gross profit by approximately 200 basis points[176] Expenses and Charges - Selling, general and administrative expenses increased by 11.9%[174] - Selling, general and administrative expenses increased by $61.8 million, or 11.9%, to $581.6 million during the three months ended September 30, 2025, representing 43.6% of net revenues[192] - Restructuring and related charges totaled $36.4 million for the three months ended September 30, 2025[175] - Restructuring charges increased significantly by 893.3% to $31.9 million during the three months ended September 30, 2025, compared to $3.2 million in the same period of 2024[194] - Marketing and advertising costs increased by $28.4 million or 22.6%, rising to 11.5% of net revenues from 9.0%[195] - Other costs increased by $33.4 million or 8.5%, rising to 32.1% of net revenues from 28.2%[195] Operating Income - North America operating income decreased by $79.3 million, or 36.5%, for the three months ended September 30, 2025, primarily due to lower net revenues and higher product input costs[223] - EMEA operating income increased by $1.0 million, or 1.9%, for the three months ended September 30, 2025, driven by higher net revenues[225] - Latin America operating income decreased by $7.6 million, or 62.2%, for the three months ended September 30, 2025, primarily due to higher product input costs[229] - Total operating income for the three months ended September 30, 2025, was $17.0 million, a decrease of $156.0 million or 90.2% compared to the previous year[221] Cash Flow and Financing - Cash and cash equivalents as of September 30, 2025, were approximately $396 million[235] - Cash flows used in operating activities decreased by $147.4 million for the six months ended September 30, 2025, compared to the previous year[246] - Total capital expenditures during the six months ended September 30, 2025, were $55.9 million, representing a $35.7 million decrease from the previous year[247] - Cash flows from financing activities increased by $689.9 million, primarily due to the issuance of $400 million of Senior Notes due 2030 and $200 million of borrowings under the revolving credit facility[248] - The company repurchased $25 million of Class C Common Stock during the three months ended September 30, 2025, totaling 5.2 million shares[241] - The company repurchased $25 million of Class C Common Stock during the six months ended September 30, 2025, compared to $40 million repurchased in the same period of 2024[248] - As of September 30, 2025, there was a total of $200 million outstanding under the revolving credit facility, with no amounts outstanding as of March 31, 2025[251] - The amended credit agreement provides for an aggregate $1.1 billion of revolving credit commitments, expiring on June 16, 2030[250] - The company issued $400 million in aggregate principal amount of 7.25% Senior Notes due July 15, 2030, with interest payable semi-annually starting January 15, 2026[262] - The company satisfied and discharged the Senior Notes due 2026 by depositing sufficient funds for all remaining principal and interest payments[260] - The company is required to maintain a consolidated EBITDA to consolidated interest expense ratio of not less than 3.50 to 1.0[256] - As of September 30, 2025, the company was in compliance with all applicable covenants under the amended credit agreement[256] - The company has $45.6 million of letters of credit outstanding as of September 30, 2025[253] - The Senior Notes due 2026 remain on the Condensed Consolidated Balance Sheets and will accrete to their par value until maturity in June 2026[261] Strategic Focus - The company is focused on enhancing digital strategy to improve consumer engagement and brand connectivity[172] - The 2025 restructuring plan is expected to incur up to $160 million in pre-tax charges, including $90 million in cash-related charges[173]