Under Armour (UA) Provides Update on Restructuring, 2025 Outlook

Under Armour, Inc. (NYSE: UAA, UA) today announced an update to its Fiscal 2025 restructuring plan, including additional initiatives to optimize the company's strategic supply chain capabilities and overall business performance.

Previously, the company expected to incur pre-tax restructuring and related charges of approximately $70 million to $90 million in connection with its Fiscal 2025 restructuring plan. Following further evaluation, the company has identified approximately $70 million of charges, largely related to the decision to exit one of its primary distribution facilities located in Rialto, California, by March 2026. Accordingly, it now expects approximately $140 million to $160 million of pre-tax restructuring and related charges to be incurred in Fiscal 2025 and Fiscal 2026, including:

• Up to $75 million in cash-related charges, consisting of approximately $30 million in employee severance and benefits costs and $45 million related to various transformational initiatives and
• Up to $85 million in non-cash charges, including approximately $7 million in employee severance and benefits costs and $78 million in facility, software, and other asset-related charges and impairments.

Through the three months ended June 30, 2024, the company had incurred approximately $34 million of restructuring and related charges ($19 million in cash and $15 million in non-cash). The company anticipates incurring approximately two-thirds of the charges under the revised total plan by the end of fiscal year 2025.

"We continue to proactively identify opportunities to optimize our business to help create a better and stronger Under Armour," said Under Armour Chief Financial Officer David Bergman. "As we work to reconstitute our brand and increase our financial productivity over the long term – optimizing our supply-chain network will make us a more efficient, uncomplicated, and agile company."

Updated Fiscal 2025 Outlook

Based on the expansion of the Fiscal 2025 restructuring plan range and the impacts related to fiscal 2025, the company updated the following expectations for its fiscal 2025 outlook:

• Operating loss is expected to be $220 to $240 million versus the previous expectation of $194 to $214 million. Excluding the mid-point of anticipated restructuring charges and the litigation reserve expense, adjusted operating income is expected to be $140 to $160 million.
• Diluted loss per share is expected to be $0.58 to $ 0.61 versus the previous expectation of $0.53 to $0.56, and adjusted diluted earnings per share are expected to be $0.19 to $0.22.

Non-GAAP Financial Information

This press release refers to "adjusted" forward-looking estimates of the company's results for its 2025 fiscal year ending March 31, 2025. References to adjusted financial measures exclude the company's litigation reserve expense, any gain or loss in connection with the sale of the MyFitnessPal platform, and the impact of the company's fiscal year 2025 restructuring plan and related charges and related tax effects. Management believes these adjustments are not core to the company's operations. The reconciliation of non-GAAP amounts to the most directly comparable financial measure calculated according to GAAP is presented in supplemental financial information furnished with this release. All per-share amounts are reported on a diluted basis. These supplemental non-GAAP financial measures should not be considered in isolation. They should be contemplated in addition to, and not as an alternative to, the company's reported results prepared per GAAP. Additionally, the company's non-GAAP financial information may not be comparable to similarly titled measures reported by other companies.

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