Under Armour Inc (NYSE:UAA) (NYSE:UA) shares are plunging after the company declared gloomy guidance.
The company reported a fourth-quarter FY24 sales decline of 4.9% year-on-year to $1.330 billion, meeting the analyst consensus estimate.
Wholesale revenue decreased 7% Y/Y to $850 million, and direct-to-consumer revenue was flat at $455 million.
Apparel revenue slipped 1% Y/Y, Footwear dropped 11%, while Accessories revenue decreased 7%. North America revenue decreased 10% to $772 million, and international revenue increased 7% to $561 million.
Gross profit decreased 1% to $599.6 million, and the gross margin expanded 170 basis points to 45%.
The company incurred an operating loss of $(3.5) million in the quarter compared to an operating income of $29.6 million.
The company held $858.7 million in cash and equivalents as of March-end. Inventory was $958.5 million, a 19.2% decrease.
The company's adjusted EPS was $0.11, beating the consensus estimate of $0.08.
Under Armour's Board of Directors has approved a restructuring plan in which the company expects to incur total estimated pre-tax restructuring and related charges of approximately $70 million to $90 million.
"Amid a challenging retail environment in fiscal 2024 that included high inventories and a consistent drumbeat of promotions – we demonstrated disciplined expense control and delivered results that were aligned with our previous outlook," said President and CEO Kevin Plank.
The Board of Directors has also authorized the repurchase of up to $500 million of Under Armour's outstanding Class C common stock.
Outlook: Under Armour sees FY25 revenue to be down at a low-double-digit percentage rate including a 15% – 17% decline in North America.
The company's FY25 adjusted EPS outlook is at $0.18 – $0.21 versus an estimate of $0.59. Gross margin is expected to be up 75 to 100 basis points. Operating income forecast is $50 million – $70 million.
Under Armour sees FY25 capital expenditure of $200 million-$220 million.
Price Action: UAA shares are trading lower by 8.8% at $6.20 in premarket at the last check Thursday.
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