• Loading stock data...
Friday, December 13, 2024

Cuts and Layoffs Coming at Under Armour As Sales Keep Dropping

  • The company has cycled through two CEOs in the two years beforehand. 
  • Adidas and Nike are also suffering in the sports apparel space. 
Annie Rice/Avalanche-Journal / USA TODAY

The winds of change continue to swirl at Under Armour. 

The company announced a restructuring Thursday that would include a significant number of layoffs after North American revenue dropped 10% to $772 million this quarter, the latest sign of turbulence in the sports apparel industry. Analysts had forecast $780 million in revenue for the company’s largest market. It’s unknown how many jobs will be impacted. 

Kevin Plank, the company’s CEO and founder, blamed the sales on a number of factors and forecasted the struggles will continue for the rest of the year. The company said it expects sales to drop between 15% and 17% in North America during the fiscal year, and revenue will be down “at a low double-digit percentage rate” for the same period. Analysts forecasted sales to grow by 2.1% for the company’s fiscal year, according to LSEG. 

“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 in a statement. 

Plank blamed both his company’s ability to perform and lower customer demand as reasons for slowing sales, an issue fellow competitors Nike and Adidas are also combating. 

“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,” he added.

The news comes amid a period of transition for the company after Plank was reinstalled as CEO in March, replacing former Marriott executive Stephanie Linnartz. Plank founded the company in 1996 as a college student at Maryland and had previously stepped back as CEO in 2019 due to struggling sales before returning to the role this year. Linnartz, a successful hotel executive, lasted less than a year on the job.

To save money, Under Armour is planning to reduce promotions and discounts, which could deflate high inventories and increase its gross margin by as much as 1%. 

“Too many areas of our product strategy have been designated as priorities,” Plank said on the earnings call. “This has caused operational inefficiency and a strain on resources, which has diluted our ability to have a consumer-centric point of view.” 

Plank revealed only so much of the restructuring—which includes a buyback of up to $500 million in shares—but it appears he plans to trim the company’s list of pressing matters in an attempt to boost sales and maximize resources. 

The restructuring is Under Armour’s second in four years after undergoing one in 2020, mainly to combat the effects of the COVID-19 pandemic. That resulted in 600 layoffs

Under Armour isn’t the only sports apparel company struggling this year. Nike announced 700 layoffs in April in what is the second phase of layoffs as part of a $2 billion cost-savings plan that was reported in December 2023. In total, Nike will lay off roughly 1,500 employees by late June, which accounts for roughly 2% of its workforce. In March, Adidas posted its first annual loss since the early ’90s. 

Linkedin
Whatsapp
Copy Link
Link Copied
Link Copied

What to Read

Sept 5, 2011; College Park, MD, USA; Maryland Terrapins fans hold up a sign referencing Miami Hurricanes former booster Nevin Shapiro during the first half at Capital One Field at Byrd Stadium.

Biden Commutes Miami Booster’s Ponzi Scheme Sentence

Nevin Shapiro gave Miami athletics millions of dollars in the early 2000s.

The Top-Secret Operation to Create the Army-Navy Football Uniforms

The two-year process includes dozens of employees, NDAs, and military historians.
Mina Kimes and Ryan Clark at NFL draft

ESPN Talent Turns Its Fire on Aaron Rodgers

The network’s NFL talent ripped the QB as ‘hypocritical’ this week.
De'Vondre Campbell

49ers Set to Cut Starter for Refusing to Enter Game: ‘Stupid’ and..

De’Vondre Campbell refused to re-enter the game Thursday night.

Featured Today

Nov 2, 2024; Denver, Colorado, USA; Detailed view of a Wilson NBA basketball held by a referee during the second half between the Utah Jazz against the Denver Nuggets at Ball Arena

‘Obvious Weak Point’: Refs Remain an NBA Gambling Concern

A season after Jontay Porter, the biggest risk may not be players.
Nov 2, 2024; Ann Arbor, Michigan, USA; Michigan Wolverines cheerleader runs with a flag before the game against the Oregon Ducks at Michigan Stadium.
opinion
December 7, 2024

College Football’s Billionaire Backer Era Begins

Is this the new normal in CFB recruiting?
LA Galaxy forward Dejan Joveljic (9) celebrates with midfielder Riqui Puig (10) after scoring a goal against Seattle Sounders FC in the second half in the 2024 MLS Cup Western Conference Final match at Dignity Health Sports Park
December 6, 2024

With or Without Messi, Major League Soccer Is Barreling Into the Future

After the Cup final, the league looks to accelerate its growth.
Dec 18, 2022; Lusail, Qatar; FIFA president Gianni Infantino claps during the awards ceremony after the 2022 World Cup final between Argentina and France at Lusail Stadium.
December 2, 2024

FIFA Wants More Matches. Resistance Is Growing Inside the Global Soccer World

Resentment and frustration over expanded schedules is nearing a breaking point.
A line of Black Friday shoppers streams into the Nike Store at Tanger Outlets in Pooler.

Sportswear Giants Are Ready for Trump’s Tariffs This Time Around

Retailers cut their exposure to China when Trump imposed tariffs in 2018.
Nov 5, 2023; New York, NY, USA; Hellen Obiri of Kenya celebrates after finishing first place in the NYC Marathon.
November 12, 2024

On Brand Posts Record Sales, Says It’s No Longer ‘Just a Running..

The Swiss company credited its full-price strategy for its stellar quarter.
Classic Football Shirts New York Pop-Up
November 18, 2024

Vintage Soccer Jerseys Have Found a Sweet Spot in the Lucrative U.S...

The money-making shirts are at the prime intersection of memorabilia and fashion.
Sponsored

How UBS Crafts Impactful Partnerships Across Sports, Arts, and Culture

As UBS continues to expand its impressive array of sports and entertainment partnerships, the company solidifies its position as a leader in wealth management.
April 13, 2019; Oakland, CA, USA; Detail view of Anta shoes worn by Golden State Warriors guard Klay Thompson (11) during the second quarter in game one of the first round of the 2019 NBA Playoffs against the LA Clippers at Oracle Arena.
November 8, 2024

Nike and Adidas Are Losing Sportswear Share in China

Chinese brands like Anta and Li-Ning are taking Nike’s share of the market.
November 7, 2024

Under Armour Turnaround Underway, Raises Profit Guidance

CEO and founder Kevin Plank returned to lead the company in April.
Brooks Running posted positive numbers in Q1 of 2023.
November 2, 2024

Brooks Running Is Having Its Best Year Ever

Brooks opened its first store in Shanghai as it pushes into China.
October 30, 2024

Lululemon-Fanatics Collab With NHL Sees ‘Explosive’ First-Day Sales

The premium collection made up 80% of all NHL merch sales.