Under Armour announced plans for a restructuring following disappointing results in its fourth quarter and fiscal year 2024 (ended March 31, 2024), as well as the expectation that revenues will continue to decline anywhere from 15% to 17% in North America in the coming year.
It’s unknown how many jobs will be impacted by the restructuring, but the company is expecting to incur approximately $15 million in severance costs in the coming months.
“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,” said Under Armour Founder Kevin Plank in a statement.
Plank was reinstalled as President and CEO in March. His return to the helm marked the third CEO switch-up at the company in nearly as many years. Previous President and CEO Stephanie Linnartz, who held the position for a little over one year, focused on overhauling Under Amour’s C-suite and introduced its first-ever loyalty program. But those changes weren’t enough to overcome the larger forces pressuring the company.
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Revenue was down 5% globally to $1.3 billion in Q4 and North American revenue decreased 10% to $772 million. Full-year results were similarly bleak, with global revenue down 3% to $5.7 billion and North American revenue decreasing 8% to $3.5 billion. However, international revenues were up in both Q4 and the full year, 7% and 8% respectively.
Those results aren’t expected to shift significantly in the coming year, with Under Armour forecasting a low-double-digit percentage rate decline in global revenue “as the company works to meaningfully reset this business following years of heightened promotional activities, particularly in its DTC business,” explained the company 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: driving demand through better products and storytelling, running smarter plays like simplifying our operating model and elevating our consumer experience,” said Plank. “In parallel, we’re focused on cost management and implementing the strategies necessary to grow our brand and improve shareholder value as we move forward.”
