Q4 2024 Under Armour Inc Earnings Call Transcript
Key Points
- Under Armour Inc (UAA) is focused on reconstituting its brand strength by emphasizing brand-building fundamentals such as product quality, compelling storytelling, and enhanced consumer experiences.
- The company has a clear strategy to streamline operations, which includes reducing SKU counts by approximately 25% to focus on higher quality and better-segmented products.
- Under Armour Inc (UAA) is making significant strides in innovation, as evidenced by multiple new product launches, including the StealthForm Uncrushable hat and various footwear releases.
- Despite a projected revenue decline, Under Armour Inc (UAA) anticipates gross margin improvement of 75 to 100 basis points, driven by reduced promotional activities and proactive product and costing initiatives.
- The company is actively working on improving its direct-to-consumer (DTC) channel by reducing discount levels and enhancing the online consumer experience, aiming to elevate the brand's premium positioning.
- Under Armour Inc (UAA) expects a revenue decline in fiscal '25, with a particularly sharp decrease in North America, projected at a low double-digit rate due to factors like lower wholesale orders and strategic decisions to restore brand health.
- The company faces challenges in its North American market, including a lack of consistent execution and increased competition, which have impacted brand perception and demand.
- Under Armour Inc (UAA) is undergoing significant leadership changes, which, while potentially revitalizing, also introduce a period of transition and uncertainty.
- The international business is expected to see a low single-digit revenue decline, influenced by conservative macro consumer trends and lessons learned from North America.
- Under Armour Inc (UAA) is incurring restructuring costs estimated between $70 million to $90 million, which could impact short-term financial performance but are intended to support long-term efficiency.
Good morning, everyone, and welcome to the Under Armour Q4 '24 Earnings Conference Call. (Operator Instructions) Please also note, today's event is being recorded.
At this time, I'd like to turn the floor over to Lance Allega, Senior Vice President, Investor Relations, Treasury and Corporate Development. Sir, please go ahead.
Good morning, and welcome to Under Armour's Fourth Quarter and Full Year Fiscal 2024 Earnings Conference Call. Today's event is being recorded for replay.
Joining us on today's call are Under Armour President and CEO, Kevin Plank; and CFO, David Bergman. Our remarks today will include certain forward-looking statements that reflect Under Armour's management's current view of our business as of May 16, 2024. These statements may include projections for our business in the present and future quarters and fiscal years. Forward-looking statements are not guarantees of future business performance, and our actual results may differ materially from those
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