Flabby Under Armour To Restructure, Cut Jobs

(RTTNews) - While reporting its second-quarter financial results on Tuesday, Under Armour Inc. (UA) lowered its fiscal 2017 revenue outlook, citing moderation in its North American business. The sports apparel maker also said that its board of directors has approved a restructuring plan that includes job cuts. Shares of Under Armour are losing more than 9 percent in the regular trading session.

In conjunction with the restructuring plan, Under Armour expects to incur total pre-tax restructuring and related charges of about $110 million to $130 million in fiscal 2017.

This includes up to $70 million in cash-related charges, consisting of up to $25 million in facility and lease terminations, $15 million in employee severance and benefits costs, and $30 million in contract termination and other restructuring charges.

It also includes up to $60 million in non-cash charges, comprised of inventory related charges as well as intangibles and other asset related impairments.

Under Armour did not provide specific details of the job cuts. However, CNBC quoted a company spokeswoman as saying that the restructuring will result in about 280 job cuts, or about 2 percent of the company's global workforce.

Looking ahead to fiscal 2017, Under Armour now expects revenue to grow 9 to 11 percent, down from the prior outlook range for growth of 11 to 12 percent, reflecting moderation in the company's North American business.

On a reported basis, Under Armour forecast full-year earnings per share in a range of $0.18 to $0.21. Excluding the impact of the restructuring plan, the company projects full-year adjusted earnings in a range of $0.37 to $0.40 per share.

Analysts polled by Thomson Reuters expect the company to earn $0.42 per share for the year. Analysts' estimates typically exclude special items.

Under Armour's second-quarter net loss available to stockholders narrowed to $12.31 million or $0.03 per share from $52.66 million or $0.12 per share in the prior year.

Revenue for the quarter rose 9 percent to $1.09 billion from $1.00 billion in the year-ago period and also increased 8 percent on a currency neutral basis.

The Street expected the company to report loss of $0.07 per share for the quarter on revenues of $1.08 billion.