Shares of the active brand shot up 16.5 percent to $15.36 in the opening minutes on Wall Street Tuesday as investors came back to the brand, which many have seen as struggling against its larger rival Nike.
But Plank and his team still have plenty of work to do and he revealed further moves in the firm’s restructuring efforts.
Under Armour’s net losses for the fourth quarter ended Dec. 31 tallied $87.9 million, or 20 cents a diluted share, compared with year-ago earnings of $103.2 million, or 23 cents. Adjusted losses, factoring out the impact of tax changes and the firm’s restructuring, totaled $1 million, or break even on a per share basis.
But revenues increased 4.6 percent to $1.37 billion from $1.31 billion. The top-line result came in ahead of the $1.33 billion analysts had penciled in.
“After years of rapid growth and building a globally recognized brand, the dynamic landscape of 2017 was a catalyst for us to begin strategically transforming Under Armour into an operationally excellent company,” Plank said. “A year into this journey, our fourth-quarter and full-year results demonstrate that the tough decisions we’re making are generating the stability necessary to create a more consistent and predictable path to deliver long-term value to our shareholders.”
Under Armour, which planned to wrap up its restructuring effort last year, said it would take another $110 million to $130 million in pretax charges to optimize its operations and cut at least $75 million in costs starting in 2019.
For this year, the company is projecting that revenues will grow in the low-single digits with a midsingle-digit decline in North America and growth of better than 25 percent elsewhere. Under Armour also said its gross margins would rise by about 50 basis points to 45.5 percent “due to benefits from lower planned promotional activity, product costs, channel mix and changes in foreign currency.”