The retail industry as a whole, as well as well-known brands such as Under Armour, are facing “hard times” in the US and beyond, as the sportswear industry is taking serious hits. And this, not only because of economic uncertainty but also because of consumers’ desire to acquire the latest and most fashionable clothes. This change has made maintaining brand loyalty almost impossible to achieve.
The emergence of newer brands such as Skims, Alo Yoga and Hoka has increased competition within this retail sector, and rival classic brands such as New Balance, Adidas and Lululemon have managed to survive by keeping up with the ever-evolving consumer by constantly offering new, innovative products.
Under Armor announced it had approved a restructuring plan to reverse declining sales by crafting a more profitable business model
And it’s worth noting that even the most powerful name in the industry, Nike, which is considered the number one sportswear company in the US, reported a 10% decline in revenue.
From the first quarter of fiscal 2024, Under Armor also reported sales declines, with the exception of the second quarter of 2024, when it reported that its sales remained flat.
However, the company formulated a turnaround plan to reverse the trend and allow profits and increased sales.
Recovery plan for Under Armour
In its fourth-quarter earnings and full-year financial results, Under Armor announced it had approved a restructuring plan to reverse declining sales by devising a more profitable business model. The company planned to invest about 70 to 90 million dollars in this project.
Four months later, Under Armor updated its plan, and decided to increase its recovery spending to about $140 million to $160 million.
In the latest quarter, the company acknowledged that it has spent a total of $40 million on its recovery and will continue to fund it until the end of the 2026 fiscal year.
This restructuring plan requires a lot of investment from the company, but it seems to be working despite being in its early stages as the company delivered better than expected results.
Sales fell, but profit rose
Under Armour’s latest earnings report showed negative year-over-year revenue growth, but the company beat analysts’ expectations, sending the company’s stock higher.
According to Under Armour’s second-quarter 2025 earnings report, revenue fell nearly 11% to $1.4 billion in the quarter ended Sept. 30. That was down 11% from a year ago, but beat analysts’ expectations of $1.3 billion.
Source: OT
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