Under Armour Reports 5.7% Revenue Decline and Significant Profit Drop for December 2024

Under Armour, Inc. reported a decline in financial performance for the three months ended December 31, 2024, with total net revenues of $1.401 billion, a decrease of 5.7% compared to $1.486 billion in the same period last year. The company experienced a significant drop in profitability, posting a net income of $1.2 million, down from $110.8 million in the prior year. The gross margin improved to 47.5%, up from 45.1%, primarily due to reduced discounting and lower product costs. However, selling, general, and administrative expenses rose by 6.4% to $637.7 million, driven by increased marketing activities and an impairment charge related to the relocation of its global headquarters.

In terms of operational metrics, Under Armour's wholesale revenue decreased by 1.0%, while direct-to-consumer sales fell by 9.1%. The apparel segment saw a revenue decline of 5.0%, and footwear sales dropped by 9.0%. The North American market, which is crucial for the company, reported a 7.8% decrease in revenues, while the EMEA region saw a 4.9% increase. The company also noted a significant restructuring plan, with an estimated $140 million to $160 million in pre-tax charges expected to be incurred during Fiscal 2025 and 2026, aimed at enhancing operational efficiencies.

Under Armour's strategic developments included the acquisition of UNLESS COLLECTIVE, Inc., which contributed to an increase in goodwill to $484.5 million as of December 31, 2024. The company also made an equity investment in ISC Sport, further expanding its market presence. The total employee headcount remained stable, with no significant changes reported in staffing levels.

The company’s cash position as of December 31, 2024, was approximately $726.9 million, down from $858.7 million at the end of the previous fiscal period. Cash flows from operating activities decreased significantly to $142.9 million, compared to $476.9 million in the prior year, primarily due to lower net income and changes in working capital. Under Armour has initiated a share repurchase program, authorizing up to $500 million in Class C Common Stock, with $65 million already repurchased as of the reporting date.

Looking ahead, Under Armour anticipates continued challenges in the retail environment, particularly in North America, but remains focused on long-term growth through strategic initiatives in its wholesale and direct-to-consumer channels. The company is committed to improving operational efficiencies and enhancing its product offerings to better meet consumer demand.