Key Takeaways
- Under Armour reported that the expenses for its restructuring plan will be much more than first believed.
- The athletic apparel maker now sees its pre-tax restructuring and related charges in the range of $140 million to $160 million, well above the initial forecast of $70 million to $90 million.
- The higher charges led Under Armour to cut its full-year outlook.
Under Armour (UAA) shares sank in intraday trading Tuesday, a day after the athletic apparel maker warned that the costs of its fiscal 2025 restructuring plan would be much more than initially thought.
The company originally had estimated the pre-tax restructuring and related charges for its program would be in the range of $70 million to $90 million. However, Under Armour explained that upon “further evaluation,” it identified another $70 million in expenses to be incurred over fiscal 2025 and 2026, “largely related to the decision to exit one of its primary distribution facilities located in Rialto, California, by March 2026.”
Through the three months that ended in June, Under Armour incurred about $34 million of those charges, and anticipates two-thirds of the revised total costs would be incurred by the end of the current fiscal year.
Under Armour Cuts FY Outlook
Because of the additional expenses, the company changed its outlook for its full-year loss per share to a range of $0.58 to $0.61 from the previous $0.53 to $0.56. It sees an operating loss of $220 million to $240 million versus the earlier $194 million to $214 million.
Shares of Under Armour sank 10% to $6.71 Tuesday afternoon and have declined nearly 24% so far this year.