http://www.latimes.com/business/bs-bz-under-armour-earnings-20170801-story.html
Lorraine Mirabella and Jeff Barker
Under Armour is cutting about 2 percent of its global workforce of 15,000, the company said Tuesday, announcing a sweeping restructuring plan as the maturing brand continues to struggle in a competitive market.
The cuts will amount to about 280 jobs and about half will be from the Baltimore headquarters, which employs about 2,100, an Under Armour spokeswoman said.
"As we execute against these difficult and necessary steps to evolve from good to great operations, our vision remains the same — making all athletes better through passion, design and the relentless pursuit of innovation," Under Armour said in a statement.
The sports apparel maker reported a net loss of $12 million for the three months that ended June 30, or a loss of 3 cents per share. That beat Wall Street estimates of 6 cents per share. Sales rose 9 percent to $1.1 billion, also beating analysts’ estimates.
The company promised an overhaul of its operations designed to build a faster, more flexible organization and meet the demands of a changing consumer
landscape. The brand has more than doubled sales over the last three years to $4.8 billion and grown to 15,000 employees.
The plan is designed to let the company increase the speed with which it brings new products to consumers, boost its digital and online business and operate more efficiently. The company took a holistic approach to its roadmap for future growth, re-evaluating how it develop products and where, when and how it will reach consumers, Under Armour Chairman and CEO Kevin Plank said during a Tuesday morning conference call with analysts.
“Stronger, faster, smarter. That’s the goal. That’s our objective,” Plank said.
He said the brand has had to make “significant investments” as the business has more than doubled over the last three years.
Earlier this year, the company said it was laying off about two dozen employees in its Connected Fitness unit. The affected employees were located mostly in Copenhagen, where the Baltimore-based company purchased the fitness app Endomondo in 2015.
Under Armour says it plans key changes in focus, shifting from being known as a company of products to a consumer-led and category-managed brand and pivoting from predominantly a men’s brand to one selling distinct collections for men, women and children. A brand with roots in the U.S. apparel market, it will focus on a more global portfolio of apparel and footwear and on online selling.
The company expects restructuring charges of about $110 million to $130 million in fiscal 2017, including for facility and lease terminations and employee severance and benefits costs.
Estimated pre-tax costs include up to $70 million in cash charges, including up to $25 million in facility and lease terminations and $15 million in employee severance and benefit costs and $30 million in contract termination and other charges. Non-cash charges include about $20 million of inventory related charges.
”We remain steadfast in driving and building our brand while shifting our operational focus” to become more disciplined in getting a return on investment and driving longterm shareholder value, Plank said.
Sales to wholesale customers, retailers that sell the sports apparel and footwear, rose 3 percent to $655 million, while sales through websites and company branded stores were up 20 percent to $386 million.
Lorraine Mirabella and Jeff Barker
Under Armour is cutting about 2 percent of its global workforce of 15,000, the company said Tuesday, announcing a sweeping restructuring plan as the maturing brand continues to struggle in a competitive market.
The cuts will amount to about 280 jobs and about half will be from the Baltimore headquarters, which employs about 2,100, an Under Armour spokeswoman said.
"As we execute against these difficult and necessary steps to evolve from good to great operations, our vision remains the same — making all athletes better through passion, design and the relentless pursuit of innovation," Under Armour said in a statement.
The sports apparel maker reported a net loss of $12 million for the three months that ended June 30, or a loss of 3 cents per share. That beat Wall Street estimates of 6 cents per share. Sales rose 9 percent to $1.1 billion, also beating analysts’ estimates.
The company promised an overhaul of its operations designed to build a faster, more flexible organization and meet the demands of a changing consumer
landscape. The brand has more than doubled sales over the last three years to $4.8 billion and grown to 15,000 employees.
The plan is designed to let the company increase the speed with which it brings new products to consumers, boost its digital and online business and operate more efficiently. The company took a holistic approach to its roadmap for future growth, re-evaluating how it develop products and where, when and how it will reach consumers, Under Armour Chairman and CEO Kevin Plank said during a Tuesday morning conference call with analysts.
“Stronger, faster, smarter. That’s the goal. That’s our objective,” Plank said.
He said the brand has had to make “significant investments” as the business has more than doubled over the last three years.
Earlier this year, the company said it was laying off about two dozen employees in its Connected Fitness unit. The affected employees were located mostly in Copenhagen, where the Baltimore-based company purchased the fitness app Endomondo in 2015.
Under Armour says it plans key changes in focus, shifting from being known as a company of products to a consumer-led and category-managed brand and pivoting from predominantly a men’s brand to one selling distinct collections for men, women and children. A brand with roots in the U.S. apparel market, it will focus on a more global portfolio of apparel and footwear and on online selling.
The company expects restructuring charges of about $110 million to $130 million in fiscal 2017, including for facility and lease terminations and employee severance and benefits costs.
Estimated pre-tax costs include up to $70 million in cash charges, including up to $25 million in facility and lease terminations and $15 million in employee severance and benefit costs and $30 million in contract termination and other charges. Non-cash charges include about $20 million of inventory related charges.
”We remain steadfast in driving and building our brand while shifting our operational focus” to become more disciplined in getting a return on investment and driving longterm shareholder value, Plank said.
Sales to wholesale customers, retailers that sell the sports apparel and footwear, rose 3 percent to $655 million, while sales through websites and company branded stores were up 20 percent to $386 million.
