• Loading stock data...
Saturday, May 18, 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

February 5, 2019; Washington, DC, USA; The grounds of the Capitol Building empty out following the conclusion of President Donald Trump's State of the Union speech on February 5, 2019.

‘A Breathtaking Lobbying Campaign’: The NCAA’s Sophisticated Effort to Save Amateurism

Inside the carefully coordinated, multimillion-dollar operation to end the athletes’ rights era.

Chaos at the PGA Championship: Here’s What We Know

The No. 1 golfer in the world nearly didn’t make it to Valhalla Golf Club.

The WNBA Rookies Are Creating a New Celebrity Row

Major celebs like Kim Kardashian and Latto are showing up for the newbies.

World’s Best Golfer Arrested Attempting to Enter PGA Championship

Scottie Scheffler was arrested and released by Louisville police Friday morning.
podcast thumbnail mobile
Front Office Sports Today

MLB, NBA, NHL Broadcasting Future Goes to Court

0:00

Featured Today

The WNBA Was Forged in Houston. Why Won’t It Go Back There?

Houston’s a perfect fit for expansion. The league isn’t considering it yet.
May 9, 2024; Indianapolis, IN, USA; Indiana Fever guard Caitlin Clark (22) stands with the team during the national anthem on Thursday, May 9, 2024, during the preseason game against the Atlanta Dream at Gainbridge Fieldhouse in Indianapolis.
May 12, 2024

‘Perfect Storm’: The Rise of Local WNBA Broadcast Pacts

With national attention reaching new heights, regional coverage could dictate the future.
Mar 29, 2023; New York, New York, USA; American actors and comedians Chris Rock (left) and Ben Stiller sit court side during the third quarter between the New York Knicks and the Miami Heat at Madison Square Garden.
May 11, 2024

The Haves and Have-Nots: How the Knicks’ Celebrity Row Works

Unwritten rules, an expectation of quid pro quo, and nothing is free.
May 6, 2023; Miami Gardens, Florida, USA; Red Bull driver Max Verstappen (1) of the Netherlands walks through the garage area following qualifying for the Miami Grand Prix at Miami International Autodrome.
May 5, 2024

Max Verstappen Is Unstoppable. Is That Hurting F1 With New American Fans?

Formula One could be facing an inevitable plateau in the United States.

Careers

Powered By

Careers in Sports

Looking for a new job? Check out these featured listings and search for openings all over the world.
Live Nation
Multiple - USA Careers
Adidas
Multiple - USA Careers
FanDuel
Multiple - USA Careers

Is There a Sneakerhead Culture for Soccer Jerseys? PE Firm Thinks So

The Chernin Group invests $38.5 million in a U.K.-based seller of vintage jerseys.
March 14, 2024

Under Armour Turns to Its Founder As Industry Turbulence Continues

The embattled sports apparel and footwear company brings back its founder.
April 11, 2024

Fanatics Steps Into Live Events After Being Tripped up by Uniforms

The new three-day sports festival is modeled somewhat after New York Comic Con.
Sponsored

Major League Rugby’s Vision for American Rugby

How Major League Rugby is leading the Rugby renaissance in the U.S.
March 13, 2024

Trouble for the Three Stripes: Adidas Posts First Annual Loss Since 1992

The North American market proves troublesome for the athletic footwear and apparel giant.
February 19, 2024

Caitlin Clark Passes Shedeur Sanders to Top Fanatics’ NIL-Era Sales

The Iowa guard took the spot hours after her record-breaking game against Michigan on Thursday.
Sponsored

NASCAR Capitalizes on the Sportswear Boom in a New Deal With ’47

With the new partnership between ’47 and NASCAR, racing fans can express their love like never before.
December 21, 2023

Nike Loses Jokić, but Posts Earnings, Income Increases

Denver Nuggets superstar embraces upstart Chinese brand 361 Degrees.