Under Armour(US:UA)2026-02-06 14:04Revenue Performance - Total net revenues decreased by 5.2%, with wholesale revenue down 6.4% and direct-to-consumer revenue down 3.9%[165] - Apparel revenue decreased by 3.3%, footwear revenue decreased by 12.0%, and accessories revenue decreased by 2.5%[165] - Net revenue decreased by 10.3% in North America, while it increased by 6.0% in EMEA, decreased by 5.1% in Asia-Pacific, and increased by 19.7% in Latin America[165] - Net revenues for the three months ended December 31, 2025, decreased by $73.3 million, or 5.2%, to $1.3 billion compared to $1.4 billion in the same period of 2024[172] - Net sales decreased by $70.9 million, or 5.1%, to $1.3 billion during the three months ended December 31, 2025, primarily due to lower average selling prices and lower unit sales in apparel and footwear[174] - Total net revenues for the nine months ended December 31, 2025, decreased by $188.5 million, or 4.7%, to $3.8 billion compared to $4.0 billion in the same period of 2024[172] - North America net revenues decreased by $86.9 million or 10.3% during the three months ended December 31, 2025[202] - EMEA net revenues increased by $17.9 million or 6.0% during the three months ended December 31, 2025[204] - Latin America net revenues increased by $11.6 million or 19.7% during the three months ended December 31, 2025[208] - Corporate Other net revenues decreased by $5.6 million during the three months ended December 31, 2025, primarily due to foreign currency hedge losses[210] Financial Metrics - Gross margin decreased by 310 basis points to 44.4%[165] - Gross profit decreased by $75.4 million to $589.7 million during the three months ended December 31, 2025, with a gross margin decline to 44.4% from 47.5%[180] - Gross profit for the nine months ended December 31, 2025, decreased by $157.1 million to $1.8 billion, with a gross margin decline to 46.6% from 48.3%[181] - Cost of goods sold for the three months ended December 31, 2025, was $738.0 million, representing 55.6% of net revenues, compared to 52.5% in the same period of 2024[171] Expenses and Charges - Selling, general and administrative expenses increased by 4.2%[165] - Selling, general and administrative expenses increased by $26.8 million, or 4.2%, during the three months ended December 31, 2025, resulting in an increase to 50.0% of net revenues[185] - Restructuring charges for the three months ended December 31, 2025, amounted to $74.98 million, significantly higher than $13.95 million in the same period of 2024[186] - Marketing and advertising costs decreased by $20.2 million or 12.6%, representing 10.5% of net revenues compared to 11.4% in the previous period[187] - Other costs increased by $47.0 million or 9.8%, rising to 39.5% of net revenues from 34.1%[187] - Restructuring charges increased by $61.0 million during the three months ended December 31, 2025, a 437.7% increase compared to the same period in 2024[188] Income and Loss - Net income loss for the three months ended December 31, 2025, was $430.8 million, a decline from a net income of $1.2 million in the same period of 2024[171] - Total operating income (loss) for the three months ended December 31, 2025, was $(149.8) million, a decrease of $163.3 million compared to the previous year[211] Restructuring and Future Plans - The 2025 restructuring plan includes up to $255 million in pre-tax charges, with $107 million in cash-related charges and $148 million in non-cash charges[163] - The restructuring plan is expected to be substantially complete by the end of Fiscal 2026[163] - The company plans to enhance consumer engagement through a digital strategy aimed at long-term growth[162] Economic and Market Factors - Estimated negative impact of approximately $80 million to cost of goods sold in Fiscal 2026 due to increased tariffs, expected to impact gross profit by approximately 160 basis points[167] - The company is actively monitoring macroeconomic factors, including inflation and foreign currency fluctuations, which may impact financial results[168] Cash Flow and Liquidity - Cash and cash equivalents as of December 31, 2025, were approximately $465 million, with a recent issuance of $400 million in Senior Notes due 2030[225] - Net cash provided by operating activities increased by $114.2 million for the nine months ended December 31, 2025, primarily driven by changes in working capital[237] - The company anticipates that cash on hand and cash from operations will be adequate to meet liquidity needs for at least the next twelve months[225] - Cash flows used in investing activities increased by $574.5 million compared to the nine months ended December 31, 2024, with $601.2 million deposited into a restricted investment related to Senior Notes due 2026[238] - Total capital expenditures for the nine months ended December 31, 2025, were $72.0 million, approximately 2% of net revenues, down from $139.9 million in the same period of 2024, representing a decrease of $67.9 million[239] - Cash flows provided by financing activities increased by $514.9 million compared to the nine months ended December 31, 2024, including the issuance of $400 million of Senior Notes due 2030 and borrowing $200 million under the revolving credit facility[240] - As of December 31, 2025, no amounts were outstanding under the revolving credit facility after repaying $200 million of borrowings during the three months ended December 31, 2025[243] Debt and Credit Agreements - The amended credit agreement provides for $1.1 billion of revolving credit commitments, expiring on June 16, 2030, with a springing maturity of 91 days prior if Senior Notes due 2030 are not refinanced[242] - The company issued $600 million in aggregate principal amount of 3.25% Senior Notes due June 15, 2026, and subsequently satisfied and discharged these notes using proceeds from the Senior Notes due 2030[251][252] - 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[254] - As of December 31, 2025, $45.5 million of letters of credit were outstanding under the amended credit agreement[245] - The company is required to maintain a consolidated EBITDA to consolidated interest expense ratio of not less than 3.50 to 1.0 and a consolidated total indebtedness to consolidated EBITDA ratio not greater than 3.25 to 1.0[248] Accounting Standards - The company’s financial statements are prepared in accordance with U.S. GAAP, requiring estimates and assumptions that may significantly affect reported amounts[256]