Under Armour(UA) - 2025 Q3 - Quarterly Report

Revenue Performance - Total net revenues decreased by 5.7% compared to the same period last year[175]. - Wholesale revenue decreased by 1.0%, while direct-to-consumer revenue decreased by 9.1%[175]. - Apparel revenue decreased by 5.0%, footwear revenue decreased by 9.0%, and accessories revenue increased by 5.7%[175]. - Net revenue decreased by 7.8% in North America, increased by 4.9% in EMEA, decreased by 5.1% in Asia-Pacific, and decreased by 15.5% in Latin America[175]. - Net revenues decreased by $85.0 million, or 5.7%, to$ 1,401.0 million for the three months ended December 31, 2024, compared to $1,486.0 million for the same period in 2023[183]. - Total net revenues for the nine months ended December 31, 2024, decreased by$ 385.9 million, or 8.8%, to $3,983.7 million from$ 4,369.7 million in the same period in 2023[183]. - North America net revenues decreased by $71.7 million, or 7.8%, to$ 843.6 million, driven by declines in both direct-to-consumer and licensing revenues[215]. - EMEA region net revenues increased by $13.8 million, or 4.9%, to$ 297.9 million, supported by growth in both wholesale and direct-to-consumer channels[215]. - North America net revenues fell by $317.1 million, or 11.6%, to$ 2,416.2 million, driven by declines in both direct-to-consumer and wholesale channels[220]. - EMEA region net revenues increased by $10.2 million, or 1.3%, to$ 808.0 million, supported by growth in the direct-to-consumer channel[220]. - Asia-Pacific region net revenues decreased by $55.7 million, or 8.6%, to$ 590.6 million, impacted by declines in both wholesale and direct-to-consumer channels[220]. Profitability and Expenses - Gross margin increased by 240 basis points to 47.5%[175]. - Selling, general and administrative expenses increased by 6.4%[175]. - Gross profit decreased by $5.5 million to$ 665.2 million during the three months ended December 31, 2024, while gross margin increased to 47.5% from 45.1%[190]. - Selling, general and administrative expenses increased by $38.5 million, or 6.4%, to$ 637.7 million for the three months ended December 31, 2024, compared to $599.2 million for the same period in 2023[194]. - Selling, general and administrative expenses as a percentage of net revenues increased to 45.5% during the three months ended December 31, 2024, compared to 40.3% in the same period in 2023[197]. - Operating income decreased by$ 57.9 million, or 81.1%, to $13.5 million for the three months ended December 31, 2024, compared to$ 71.4 million for the same period in 2023[216]. - Total operating income (loss) for the nine months ended December 31, 2024, was $(113.1) million, a decrease of$ 346.4 million compared to $233.3 million in 2023[219]. - Net income decreased significantly to$ 1.2 million for the three months ended December 31, 2024, compared to $110.8 million for the same period in 2023[182]. Restructuring and Charges - The 2025 restructuring plan is estimated to incur pre-tax charges of approximately$ 140 million to $160 million during Fiscal 2025 and Fiscal 2026[176]. - Total costs recorded in restructuring charges for the three months ended December 31, 2024, amounted to$ 17.764 million[176]. - Employee-related costs recorded in restructuring charges were $1.584 million for the three months ended December 31, 2024[176]. - Restructuring charges increased by$ 13.9 million, or 100.0%, to $13.9 million for the three months ended December 31, 2024, primarily due to employee-related charges of$ 1.6 million, facility-related charges of $5.7 million, and other restructuring charges of$ 6.7 million[199]. Cash Flow and Liquidity - As of December 31, 2024, the company had approximately $726.9 million in cash and cash equivalents, sufficient to meet liquidity needs for at least the next twelve months[224]. - Net cash provided by operating activities decreased by$ 334.0 million to $142.9 million for the nine months ended December 31, 2024, compared to$ 476.9 million in 2023[233]. - Cash flows used in investing activities increased by $27.7 million to$ (99.2) million, primarily due to higher capital expenditures and acquisitions[235]. - Cash flows used in financing activities increased by $79.5 million to$ (154.5) million, including an $80.9 million repayment of Convertible Senior Notes and$ 65.0 million for share repurchases[237]. Capital Expenditures and Financing - Total capital expenditures for the nine months ended December 31, 2024, were $139.9 million, representing approximately 4% of net revenues, an increase of$ 23.3 million from $116.5 million in 2023[236]. - The company has a revolving credit facility of$ 1.1 billion, with no amounts outstanding as of December 31, 2024[238]. - The company authorized a share repurchase program of up to $500 million, with$ 65 million repurchased as of December 31, 2024[229][232]. - The company issued $600.0 million of 3.25% senior unsecured notes due June 15, 2026, with interest payable semi-annually[247]. - The amended credit agreement requires a consolidated EBITDA to consolidated interest expense ratio of not less than 3.50 to 1.0[243]. Other Financial Metrics - Other expense, net increased by$ 50.5 million to $2.6 million during the three months ended December 31, 2024, primarily due to an earn-out related to the sale of the MyFitnessPal platform[206]. - Income tax expense decreased by$ 2.3 million to $6.3 million for the three months ended December 31, 2024, with an effective tax rate of 83.3% compared to 7.2% in the prior year[208]. - Marketing costs decreased by$ 31.1 million, or 7.1%, but as a percentage of net revenues, they increased to 10.2% from 10.0%[202]. - Other costs increased by $228.6 million, or 16.8%, primarily due to higher litigation expenses and an impairment charge of$ 28.4 million[202]. - Interest expense, net increased by $3.2 million to$ 3.4 million during the three months ended December 31, 2024, primarily due to a decrease in interest income[203].