• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Editor's Pick Under Armour is laying off workers as retailer says North America sales will plunge this year
Editor's Pick

Under Armour is laying off workers as retailer says North America sales will plunge this year

by May 17, 2024
by May 17, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Under Armour announced a broad restructuring plan on Thursday as it said sales in its largest market, North America, plunged 10% and predicted the trend will get worse throughout its current fiscal year. 

The athletic apparel retailer also saw profits sink by more than 96% during its fiscal fourth quarter, compared with the year-ago period. 

It’s unclear how many employees Under Armour will lay off as part of the restructuring, but the plan is expected to cost between $70 million and $90 million, a portion of which will be used for employee severance and benefits costs. The company declined to share more information with CNBC about its restructuring.

The company’s shares were down more than 2% in morning trading. 

Here’s how the athletic apparel retailer did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

The company’s reported net income for the three-month period that ended March 31 was $6.6 million, or 2 cents per share, compared with $170.6 million, or 38 cents per share, a year earlier. Excluding one-time items, the company reported earnings of 11 cents per share. 

Sales dropped to $1.33 billion, down about 5% from $1.4 billion a year earlier. 

During the quarter, sales in North America declined 10% to $772 million, worse than the $780 million that analysts had expected, according to StreetAccount. 

Under Armour said it expects sales to continue to worsen in North America. The company anticipates they will drop between 15% and 17% in its current fiscal year. 

“Due to a confluence of factors, including lower wholesale channel demand and inconsistent execution across our business, we are seizing this critical moment to make proactive decisions to build a premium positioning for our brand, which will pressure our top and bottom line in the near term,” founder and CEO Kevin Plank said in a statement. 

“Over the next 18 months, there is a significant opportunity to reconstitute Under Armour’s brand strength through achieving more, by doing less and focusing on our core fundamentals,” he added.

Across Under Armour’s business, the company is expecting revenue to be down “at a low-double-digit percentage rate” in its current fiscal year, while analysts had expected sales to grow by 2.1%, according to LSEG. 

The company is planning to cut down on promotions and discounting, which it expects will lead its gross margin to rise between 0.75 and 1 percentage point for the fiscal year. 

It’s expecting diluted earnings per share to be between 2 cents and 5 cents and adjusted diluted earnings per share to be between 18 cents and 21 cents for the year. Analysts had expected earnings per share of 52 cents, according to LSEG. 

Under Armour’s rough quarter comes about two months after the retailer announced former Marriott executive Stephanie Linnartz would be stepping down from her role as CEO after barely a year on the job and Plank would once again take the helm of the company he founded in 1996. 

Linnartz was the second CEO the company has cycled through in less than two years. 

She was hired on a bet that her experience building out Marriott’s renowned Bonvoy loyalty program and driving digital revenue for the hotel giant would offset her lack of experience in the retail industry. Before her departure, she managed to overhaul Under Armour’s C-suite and build out its loyalty program. She was attempting to pivot the brand’s assortment to a more athleisure-focused offering that had more stylish options for women. 

Ultimately, she was ousted before those plans could become a reality. Following the announcement of Linnartz’s departure, a number of analysts downgraded Under Armour and lowered their price targets. Shares of the company were down about 23% year to date, as of Wednesday’s close. 

Read the full earnings release here.

This post appeared first on NBC NEWS
You Might Also Like
  • What Fitch’s downgrade of the U.S. government means for taxpayers and consumers
  • How to get more money out of a savings account while interest rates are high
  • Disney raises streaming prices for Hulu, Disney+ and ESPN+
  • Supreme Court Justice Samuel Alito sold Bud Light owner’s stock amid boycott
Share
0
FacebookTwitterPinterestWhatsapp

previous post
McDonald’s $5 value meal is coming in June — and staying for just a month
next post
Gold and Silver Set to Smash Records: Could 2024 Be Their Biggest Year Yet?

You may also like

’60 Minutes’ producer leaves show, citing a loss of journalistic...

April 23, 2025

Federal Reserve raises key interest rate to highest level in...

July 27, 2023

The fight over credit card swipe fees enters a new...

January 6, 2025

Hasbro laying off 1,100 workers as weak toy sales persist...

December 13, 2023

JPMorgan creates new role overseeing junior bankers as Wall Street...

September 19, 2024

South Florida braces for Messi debut — and the possibility...

July 22, 2023

Baltimore businesses see bridge fallout as a hurdle they hope...

April 7, 2024

Target says it will close nine stores in major cities,...

September 27, 2023

Alaska Airlines CEO: We found ‘many’ loose bolts on our...

January 24, 2024

N.Y. Fed President John Williams says inflation is too high...

June 1, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout, pulls outlook

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025
    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,632 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,302 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,186 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout,...

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Dow tumbles 475 points, S&P 500...

    April 17, 2024

    Target wrestles with pullback in spending...

    May 19, 2023

    JPMorgan Chase posts record profit as...

    January 16, 2025
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here