Revenue 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] - North America net revenue decreased by 8.3%, while EMEA increased by 12.2%[174] - North America net revenues decreased by $71.8 million or 8.3% during the three months ended September 30, 2025[211] - EMEA net revenues increased by $34.5 million or 12.2% during the three months ended September 30, 2025[214] - Asia-Pacific net revenues decreased by $28.5 million or 13.7% during the three months ended September 30, 2025[216] - Latin America net revenues 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 Expenses - 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] - 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] - Selling, general and administrative expenses decreased by $245.2 million, or 18.1%, during the six months ended September 30, 2025, representing 45.1% of net revenues[192] - 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] Financial Position and Cash Flow - Cash and cash equivalents as of September 30, 2025, were approximately $396 million[235] - Net cash used in operating activities was $(20,978) million for the six months ended September 30, 2025, a decrease of $147.4 million compared to the previous year[245] - 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] - The company repurchased $25 million of Class C Common Stock during the three months ended September 30, 2025, totaling 5.2 million shares[241] - Approximately $650 million of additional current and prior foreign earnings were repatriated, including a $250 million cash dividend in Fiscal 2026[238] - The company has a share repurchase program authorized for up to $500 million through May 31, 2027, with approximately $385 million remaining[243] - Cash flows from financing activities increased by $689.9 million, primarily due to the issuance of $400 million in Senior Notes due 2030 and $200 million in borrowings under the revolving credit facility[248] - 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] Debt and Financing - The company issued $400 million in Senior Notes due 2030, bearing interest at a fixed rate of 7.25% per annum, payable semi-annually starting January 15, 2026[262] - The company satisfied and discharged the Senior Notes due 2026 using net proceeds from the Senior Notes due 2030, along with borrowings and cash on hand[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 amended credit agreement provides for $1.1 billion in revolving credit commitments, expiring on June 16, 2030, with a springing maturity of 91 days prior if Senior Notes due 2030 are not refinanced[250] - The amended credit agreement contains negative covenants that limit the company's ability to incur additional indebtedness and engage in certain transactions[255] - The company has $45.6 million of letters of credit outstanding as of September 30, 2025[253] Strategic Initiatives - The 2025 restructuring plan is expected to incur up to $160 million in pre-tax charges, including $90 million in cash-related charges[173] - 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] - The company plans to enhance consumer engagement through a digital strategy aimed at long-term growth[172] - The company is actively monitoring macroeconomic factors, including inflation and foreign currency fluctuations, that may impact financial results[177] Income and Tax - Interest expense, net increased by $6.9 million to $8.6 million during the three months ended September 30, 2025, primarily due to the issuance of Senior Notes due 2030[200] - Income tax expense increased by $28.1 million to $25.9 million during the three months ended September 30, 2025, with an effective tax rate of 345.9%[205]
Under Armour(UAA) - 2026 Q2 - Quarterly Report