Under Armour announced a broad restructuring plan on Thursday as it said sales in its largest market, North America, plunged 10% and predicted the trend will get worse throughout its current fiscal year. <\/p>\n
The athletic apparel retailer also saw profits sink by more than 96% during its fiscal fourth quarter, compared with the year-ago period. <\/p>\n
It\u2019s unclear how many employees Under Armour will lay off as part of the <\/strong>restructuring, but the plan is expected to cost between $70 million and $90 million, a portion of which will be used for employee severance and benefits costs. The company declined to share more information with CNBC about its restructuring.<\/p>\n The company\u2019s shares were down more than 2% in morning trading. <\/p>\n Here\u2019s how the athletic apparel retailer did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:<\/p>\n The company\u2019s reported net income for the three-month period that ended March 31 was $6.6 million, or 2 cents per share, compared with $170.6 million, or 38 cents per share, a year earlier. Excluding one-time items, the company reported earnings of 11 cents per share. <\/p>\n Sales dropped to $1.33 billion, down about 5% from $1.4 billion a year earlier. <\/p>\n During the quarter, sales in North America declined 10% to $772 million, worse than the $780 million that analysts had expected, according to StreetAccount. <\/p>\n Under Armour said it expects sales to continue to worsen in North America. The company anticipates they will drop between 15% and 17% in its current fiscal year. <\/p>\n \u201cDue 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,\u201d founder and CEO Kevin Plank said in a statement. <\/p>\n \u201cOver the next 18 months, there is a significant opportunity to reconstitute Under Armour\u2019s brand strength through achieving more, by doing less and focusing on our core fundamentals,\u201d he added.<\/p>\n Across Under Armour\u2019s business, the company is expecting revenue to be down \u201cat a low-double-digit percentage rate\u201d in its current fiscal year, while analysts had expected sales to grow by 2.1%, according to LSEG. <\/p>\n The company is planning to cut down on promotions and discounting, which it expects will lead its gross margin to rise between 0.75 and 1 percentage point for the fiscal year. <\/p>\n It\u2019s expecting diluted earnings per share to be between 2 cents and 5 cents and adjusted diluted earnings per share to be between 18 cents and 21 cents for the year. Analysts had expected earnings per share of 52 cents, according to LSEG. <\/p>\n Under Armour\u2019s rough quarter comes about two months after the retailer announced former Marriott executive Stephanie Linnartz would be stepping down from her role as CEO after barely a year on the job and Plank would once again take the helm of the company he founded in 1996. <\/p>\n Linnartz was the second CEO the company has cycled through in less than two years. <\/p>\n She was hired on a bet that her experience building out Marriott\u2019s renowned Bonvoy loyalty program and driving digital revenue for the hotel giant would offset her lack of experience in the retail industry. Before her departure, she managed to overhaul Under Armour\u2019s C-suite and build out its loyalty program. She was attempting to pivot the brand\u2019s assortment to a more athleisure-focused offering that had more stylish options for women. <\/p>\n Ultimately, she was ousted before those plans could become a reality. Following the announcement of Linnartz\u2019s departure, a number of analysts downgraded Under Armour and lowered their price targets. Shares of the company were down about 23% year to date, as of Wednesday\u2019s close. <\/p>\n Read the full earnings release here.<\/p>\n<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Under Armour announced a broad restructuring plan on Thursday as it said sales in its largest market, North America, plunged 10% and predicted the trend will get worse throughout its current fiscal year. The athletic apparel retailer also saw profits sink by more than 96% during its fiscal fourth quarter, compared with the year-ago period. 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