The following is a summary of the Under Armour, Inc. (UAA) Q4 2024 Earnings Call Transcript:
Financial Performance:
Under Armour reported a Q4 2024 revenue decrease of 5% to $1.3 billion, driven by softer wholesale demand, off-price channel sales, and a downturn in e-commerce.
The gross margin increased by 170 basis points to 45% due to lower product and freight costs and a favorable channel mix.
For fiscal year 2024, revenue declined by 3% to $5.7 billion, primarily due to challenges in the North American business.
In 2025, the company expects revenue to fall at a low double-digit rate. This includes a 15-17% decline in North America and a single-digit decline internationally.
Under Armour expects a gross margin improvement of 75 to 100 basis points in fiscal 2025 due to reduced promotional activities and product costing initiatives.
The company anticipates Pre-tax restructuring and related charges to fall between $70 to $90 million.
Business Progress:
Under Armour is focusing on rebuilding brand strength by manufacturing superior products, creating effective marketing narratives, and improving business delivery.
The company plans to reduce its SKU count by about 25% in the next 18 months and will focus on scaling better and best offerings to drive segmentation balance.
It is working on faster go-to-market capability and plans to offer direct-to-consumer exclusive products.
It will reorganize its product and marketing teams around its largest revenue sports categories for efficient single go-to-market strategies.
The company aims to enhance consumer experiences by upgrading retail, e-commerce, and wholesale businesses with meticulous merchandising strategies and thoughtful distribution choices.
A total brand rejuvenation is in progress, with a keen focus on their e-commerce platform and innovative product lines.
Under Armour plans to augment its operations, strategy, product development, and marketing with a stronger executive team and efficient restructuring plans for higher returns and sustainable shareholder value.
Internationally, efforts are underway to economically grow while maintaining brand reputation.
Under Armour's CEO is focused on bridging the gap between high-quality product offerings and corresponding brand storytelling, supplemented by a unique market positioning and distribution strategy revamp.
The brand also plans to expand in the APAC region and improve its in-store product presentation in the United States.
A new three-year, $500 million share buyback program has been approved.
More details: Under Armour-A IR
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