Under Armour has reported disappointing earnings that fell short of expectations, leading to a warning from co-founder Kevin Plank that reviving the sportswear brand will be a challenging process. Plank announced plans for a comprehensive restructuring plan, including a forecast of over a 10 percent decline in sales for the fiscal year and additional layoffs.
Despite the initial dip in shares following the quarterly results, there was a rise in share value after Plank spoke with analysts. Plank acknowledged that the company had spread itself too thin with too many products and initiatives. To address this issue, Under Armour will be shifting towards becoming a more premium brand, focusing on higher-priced, exclusive offerings through its own retail outlets and digital platforms.
Under Armour will be refocusing on men’s apparel and hardcore sports gear, reversing previous strategies that included expanding into athleisure and targeting women’s apparel. Plank assured analysts that while men’s apparel will be the main focus, the company is not deprioritizing footwear or women’s business entirely.
The restructuring may involve significant layoffs, as the company anticipates charges between $70 million and $90 million for the year. This could result in a sizeable reduction in the number of employees, particularly in retail positions. Under Armour is aiming to strengthen its brand by simplifying its offerings and focusing on core fundamentals.
