Under Armour calls for bigger losses ahead on higher restructuring charges

By Claudia Assis

Under Armour cuts outlook after restructuring update

Shares of Under Armour Inc. dropped 1.3% in the extended session Monday after the retailer said it expects a bigger operating loss in fiscal 2025 due to increased restructuring costs.

Under Armour (UAA) revised its outlook to forecast a fiscal 2025 operating loss between $220 million and $240 million, compared with a previous expectation of a loss between $194 million and $214 million.

See also: Lululemon's diagnosis of its current woes? Not enough 'newness.'

The company also called for a bigger-than-planned per-share loss for the year, although it kept its adjusted per-share earnings forecast intact.

Under Armour said it expected a per-share loss between 58 cents and 61 cents for the fiscal year, compared with a prior forecast of 53 cents to 56 cents. It expects adjusted EPS between 19 cents and 22 cents.

The guidance tweak came as the retailer said it now expects pre-tax restructuring charges of about $140 million to $160 million to be incurred in fiscal 2025 and fiscal 2026, including charges related to employee severance and benefits costs.

Previously, it expected charges of around $70 million to $90 million for fiscal 2025 for its ongoing restructuring plan.

"We continue to proactively identify opportunities to optimize our business to help create a better and stronger Under Armour," Chief Financial Officer David Bergman said in a statement.

Shares of Under Armour are down nearly 15% this year, contrasting with gains of about that much for the S&P 500 index SPX in 2024.

See also: Topgolf Callaway wants to split up after a little more than three years. Here's what could complicate the breakup.

-Claudia Assis

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

09-09-24 2013ET

Copyright (c) 2024 Dow Jones & Company, Inc.