Under Armour Inc.’s (NYSE: $UAA) stock tumbled nearly 10% in pre-market trading Thursday but bounced back when the markets opened while the founder and CEO Kevin Plank explained the company’s restructuring plans going forward during an earnings call. The stock closed Thursday down 1.3% at $6.71 a share.
The Baltimore-based sportswear maker announced a grim 2025 outlook, reporting that sales in North America, its largest market, fell 10%. UA expects sales to worsen, anticipating a steeper drop between 15% and 17% in its fiscal year.
The company also said its profits fell more than 96% during the fourth quarter of fiscal 2024 compared with the year-ago period, and sales dropped to $1.33 billion, down about 5% from $1.4 billion a year earlier.
Plank blamed the rough quarter results on “a confluence of factors, including lower wholesale channel demand and inconsistent execution across UA’s business,” and announced a broad restructuring plan that includes layoffs.
The CEO did not mention how many jobs will be affected within the company but said the layoffs will cost $70 million to $90 million, which will be used for employee severance packages. In addition to job cuts within the company, the company said it will reduce the number of agencies, consultants and outside experts across the brand, especially in marketing.
Under Armour’s negative outlook for the quarter comes two months after the company announced Plank’s return as CEO after Stephanie Linnartz stepped down. Linnartz was the president of Marriott International before she took over from Patrik Frisk last February. Plank stepped aside as CEO in 2019 amid complaints about workplace culture. In addition to changing CEOs, the company shuffled through top executives over the past decade. Among Plank’s restructuring plans for the company is bringing a CMO, a role the company was looking to fill for some time.
“We are simply doing too much stuff. There are too many products, too many initiatives, too much of too much,” Plank said. The company will reduce discounted products that it sells to wholesalers and will sell more high-priced premium products through its own stores and DTC channels, with a focus on men’s apparel business.
Additionally, Plank expressed his commitment to the company’s core business. “As you know, I’ve done different things. But I’ve realized that I love selling shirts and shoes,” he said. “I think Under Armour makes a lot of good, some better and nowhere near enough best. We’re going to focus on that.”
(This article has been updated in the first paragraph with the stock’s Thursday closing price.)
