Sept 9 (Askume) – Under Armour (UAA.N) said on Monday the sportswear maker expects its restructuring costs to be higher than previously expected, sending its shares down 3 percent in after-market trading.
The company wants to turn around its business and focus on its core operations under a restructuring plan unveiled in May, when CEO Kevin Plank said prioritizing too many areas in its product strategy was leading to inefficiencies and draining resources.
Under Armour, who returned as CEO earlier this year after stepping down in 2019 , is cutting promotions, inventory and labor while focusing on selling higher-margin products such as men’s clothing.
The Baltimore-based company expects to incur pre-tax restructuring charges of $140 million to $160 million in fiscal 2025 and 2026.
Under Armour said the rising costs were related to the company’s decision to move out of one of its distribution facilities in Rialto, California.
As of Monday’s close, the company’s shares were down 15% year to date. Shares of peers Nike (NKE.N) and Lululemon Athletica (LULU.O) have fallen 27% and 50%, respectively, amid slowing demand and stiff competition.
Under Armour expects a net loss of 58 cents to 61 cents per share in fiscal 2025, compared with a previous forecast that estimated a loss of 53 cents to 56 cents per share.
However, the company still maintained its adjusted earnings per share forecast of 19 cents to 22 cents.
