Under Armour, Inc. updated to its Fiscal 2025 restructuring plan late Monday, including additional initiatives to optimize the company’s strategic supply chain capabilities and overall business performance.
The company had previously 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 said it has identified approximately $70 million of charges, largely related to the decision to exit one of its primary distribution facilities located in Rialto, CA, by March 2026.
The company 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 CFO 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 now expected to be $220 million to $240 million, a significant increase versus the previous expectation of $194 million to $214 million. Excluding the mid-point of anticipated restructuring charges and the litigation reserve expense, adjusted operating income is expected to be $140 million to $160 million.
Diluted loss per share is expected to be in the range between 58 cents and 61 cents per share, an increase from the previous expectation of 53 cents to 56 cents per share, and Adjusted diluted earnings per share are expected to be in the range between 19 cents and 22 cents per share.
Image courtesy Under Armour