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The sports apparel brand plans to cut costs and refocus on men's athletic apparel as revenue declines.

Under Armour Inc. reported that total revenue and ecommerce revenue both declined in its fourth quarter of fiscal 2024 ended March 31.

Total revenue declined 5% to $1.3 billion year over year, the athletic apparel retailer said. Wholesale revenue declined 7% to $850 million, and direct-to-consumer (DTC) revenue was flat. Ecommerce revenue decreased 8%. Ecommerce sales made up 43% of total DTC sales in the quarter.

Meanwhile, revenue from stores owned and operated by Under Armour grew 7% year over year. The retailer reported net income of $7 million, and an operating loss of $4 million.

“Amid a challenging retail environment in fiscal 2024 that included high inventories and a consistent drumbeat of promotions — we demonstrated disciplined expense control and delivered results that were aligned with our previous outlook,” said Under Armour president and CEO Kevin Plank. “We also maintained a strong balance sheet, closing the year with a solid cash position and healthy inventory levels.”

Under Armour is No. 99 in the Top 1000. The Digital Commerce 360 database ranks North America’s leading online retailers by their web sales.

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Under Armour fiscal 2024 revenue

The retailer’s full-year results were similar to its Q4 report. In fiscal 2024, Under Armour total revenue declined 3% to $5.7 billion. 

Wholesale revenue declined 7% to $3.2 billion, and DTC revenue grew 3% to $2.3 billion. Under Armour ecommerce accounted for 41% of fiscal 2024 sales and grew 1% year over year. 

Net income was $232 million, with an operating income of $230 million.

Revenue from apparel made up the largest portion, down 2% to $3.8 billion. Revenue from footwear declined 5% to $1.4 billion, and revenue from accessories declined 1% to $406 million.

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Plank outlined initiatives underway at Under Armour to improve the retailer’s ecommerce sales.

“The digital goal is to transform our ecommerce business into a significantly more premium platform over the next 18 months. This includes improving our online merchandising, creating a more engaging brand-building environment that encourages our consumers through compelling products with a clear story of why it will make them better,” he told investors. 

The changes will include fewer online promotions and a more streamlined design, he said.

Under Armour restructuring plan

After announcing declining revenue, Under Armour introduced a plan to turn things around. 

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“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,” Plank said. 

“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,” he continued.

The restructuring plan will cost between $70 and $90 million, the company said. About $15 million of that cost will go toward severance and benefits for laid-off employees, it said without sharing any further information.

Another $35 million will be related to other changes in the company, it shared. Up to $40 million will go toward facility and software charges.

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Going forward, Under Armour’s plan is to “simplify, modernize, and optimize” the company, Plank explained. That includes paring down the product lineup and refocusing primarily on men’s athletic apparel, he added.

Other changes at Under Armour

In March, Under Armour replaced CEO Stephanie Linnartz with founder and executive chairman Kevin Plank. He previously served as CEO from the company’s founding in 1996 until 2019.

“For nearly 30 years, Under Armour has focused on inspiring athletes with industry-leading performance solutions they never knew they needed, and once they’ve tried them, can’t imagine living without,” Plank said in a statement at the time his appointment was announced. “As the company continues to navigate several post-pandemic consumer, industry, and brand-specific factors, we are working hard to reconstitute our strengths and make thoughtful, balanced business decisions to drive enduring success for athletes, customers, and shareholders. I am energized about the team we have put into place and look forward to seizing the opportunities ahead.”

Under Armour earnings

For the fiscal fourth quarter ended March 31, Under Armour reported:

  • Under Armour revenue decreased 5% to $1.3 billion.
  • Net income decreased to $7 million from $171 million in the year-ago quarter.
  • Under Armour ecommerce revenue declined 8% to make up 43% of DTC revenue.

For the nine months ended Dec. 31, Under Armour reported:

  • Revenue decreased 3% to $5.7 billion from the year-ago period.
  • Net income declined to $232 million from $387 million in the prior-year’s period.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Under Armour ecommerce update.

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