[Baltimore Sun] Under Armour turnaround costs revised to up to $160 million
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A plan to elevate the Under Armour brand and make it more efficient is expected to cost roughly twice as much as previously announced and include the closure of a California distribution center.
Baltimore-based Under Armour announced a restructuring plan in June that was expected to include layoffs and cost an estimated $70 million to $90 million. The company updated its plan Monday, saying it expects to spend an additional $70 million to improve its supply chain capabilities.
The additional charges, to be incurred in fiscal years 2025 and 2026, are tied to plans to close one of its primary distribution facilities, in Rialto, California, by March 2026. Charges cover employee severance and benefits and other expenses.
“We continue to proactively identify opportunities to optimize our business to help create a better and stronger Under Armour,” Chief Financial Officer Dave Bergman said in the company’s announcement.
The company is looking to become more efficient and agile by streamlining its supply-chain network, he said.
Under Armour revised its fiscal 2025 outlook based on the updated plan. It expects a loss of 58 cents to 61 cents per share, versus the previously expected 53 cents to 56 cents per share.
Analyst Sharon Zackfia of William Blair maintained a “market perform” rating on the company’s stock. Shares of Under Armour fell 65 cents Tuesday, closing at $6.81 each.
“Although the goal of resetting the brand to a more premium positioning while narrowing the focus to core fundamentals could prove to be a meaningful catalyst over the longer term, the reality is that this will take time to unfold,” Zackfia said in a report.
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