Under Armour(US:UA)2025-05-13 13:30Financial Data and Key Metrics Changes - The fourth quarter revenue decreased by 11% to $1.2 billion, slightly better than the expected 10% decline for the full year [38][45] - Full year revenue declined by 9% to $5.2 billion, with North American revenue down 11% and APAC revenue down 13% [45][46] - Gross margin for the fourth quarter increased by 170 basis points year over year to 46.7%, driven by lower product and freight costs [42][46] - Full year gross margin increased by 180 basis points to 47.9%, surpassing expectations [46] Business Line Data and Key Metrics Changes - Apparel revenue decreased by 11%, while footwear revenue declined by 17% [41] - Accessories revenue increased by 2%, benefiting from the decision to bring the socks business in-house [41] - Direct to consumer revenue was down 15%, primarily due to a 27% decrease in e-commerce sales [40] Market Data and Key Metrics Changes - North American revenue declined by 11%, primarily due to a decrease in the DTC business [38] - EMEA revenue decreased by 2%, remaining flat on a currency-neutral basis [39] - APAC revenue was down 27%, attributed to a highly competitive environment [39] Company Strategy and Development Direction - The company is focusing on higher quality revenue and brand strength while driving gross margin expansion [46][50] - A category management operating model is being implemented to enhance efficiency and decision-making [12] - The company aims to reduce promotional activities to build a more premium online presence [40][75] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the evolving business environment and emphasized the importance of agility [5][36] - The company anticipates a modest top-line contraction for fiscal 2026 due to recent changes in trade policy [46][50] - Management highlighted the need for a disciplined approach to cost management while maintaining marketing investments [78] Other Important Information - The company has recognized $32 million in restructuring charges for the fourth quarter, with total charges expected to be between $140 million and $160 million [43][46] - Inventory was down 1% year over year to $946 million, aligning with expectations [44] Q&A Session Summary Question: Can you provide more details about the North American reset? - Management highlighted the importance of leadership and the need to move away from constant discounting to build brand momentum [54][60] Question: What can you share about upcoming major brand activations? - The company plans to embrace its underdog DNA with a campaign that focuses on storytelling rather than price [62][64] Question: How is the company planning to normalize e-commerce with reduced promotional activities? - Management emphasized the importance of creating a brand-inspired online experience and leveraging loyalty programs to drive revenue [72][74] Question: What are the expected savings from the restructuring plan? - The company anticipates $75 million in annual savings from restructuring efforts, with a focus on maintaining marketing investments [76][78] Question: Can you provide insights on inventory management? - Management expressed confidence in managing inventory tightly and noted that a significant portion is current, minimizing old or excess stock [84]