Under Armour boosted its financial forecast in its third quarter earnings report on Friday, in a sign that company CEO Kevin Plank sees as a major turnaround point following a planned reset effort.
In the report, Under Armour said that revenue decreased 5 percent to $1.33 billion, an expected dip but less than a projected 6.3 percent drop to $1.31 billion. Meanwhile, North American revenue fell 10 percent to $757 million as international sales rose 3 percent to $577 million.
The company also noted that it would continue to be impacted by tariffs out of major manufacturing depots like Vietnam and Indonesia that will push an additional $100 million to it costs this fiscal year.
“Our third quarter adjusted operating results exceeded expectations, and despite a few unfortunate, non-recurring impacts, we’re encouraged by the progress we’re making in the business to reignite brand momentum,” Plank said. “In North America, we believe the December quarter marked the most challenging phase of our business reset, and we expect greater stability ahead as we build on this progress globally.”
Under Armour has been navigating its way through major restructuring efforts that became even more apparent in November when it announced would split from Curry Brand and shift focus to its core product lines.
The company initially said it would absorb $160 million in pre-tax restructuring costs but later revised the figure to consider an additional $95 million in associated spending that boosted the figure to $255 million. Moving on from Curry after more than a decade would save Under Armour around $50 million and by December the company had already began dismantling the Curry team despite a product rollout that would stretch into October.
But in January, Under Armour shares soared on news that one of its largest shareholders, Fairfax Financial Holdings, increased its stake by buying an additional 13.1 million shares and raised its stake to around 42 million shares. The move pushed Fairfax from 16 percent to 22 percent in Under Armour with the purchase — but still behind Blank’s holdings — that was disclosed in filings in late December.
Plank returned to Under Armour in early 2024 after leading the company since its founding in 1996 before stepping down from the role in 2020. His second stint as chief has been marked by taking on a reboot of the brand in the face of flagging sales and increased competition. But a strategy focused on trimming product lines, cutting costs and refreshing its core apparel and footwear offerings have been a critical part of realigning the brand.
“Our transformation is accelerating as we sharpen our focus and strengthen execution,” Blank said in the earnings report. “Our strategy is gaining traction through better products, bolder storytelling, and a more disciplined market presence, positioning Under Armour to operate with greater intention and confidence going forward.”
