Under Armour’s Restructuring: What’s Changing and Why
Under Armour, Inc. (NYSE: UAA) is moving ahead with a wide-ranging restructuring to sharpen its supply chain and lift overall efficiency. The effort is larger than first planned: the company previously projected pre-tax restructuring charges of $70 to $90 million, but a new estimate puts that range at $140 to $160 million.
A central step in the plan is the closure of a major distribution center in Rialto, CA, targeted for March 2026. Shutting this facility is meant to simplify the logistics network and reduce structural costs. The near-term bill is higher, yes, but the company expects the outcome to be a leaner, quicker operation better able to handle what comes next.
A Closer Look at the Costs
The restructuring includes both cash and non-cash expenses. Cash-related outlays could reach as much as $75 million, broken into about $30 million for severance and employee benefits and roughly $45 million for transformation efforts tied to operational improvements.
Non-cash charges are expected to total about $85 million. Within that, approximately $7 million relates to severance and about $78 million to asset impairments across facilities, software, and other assets. By the end of the first quarter of fiscal 2025, Under Armour had recorded $34 million of restructuring costs: $19 million in cash-related items and $15 million in non-cash items. The company currently expects roughly two-thirds of the total restructuring charges to be recognized by the end of fiscal 2025.
Updated Guidance for Fiscal 2025
Reflecting the larger program, Under Armour now forecasts an operating loss of $220 to $240 million for fiscal 2025, compared with the prior range of $194 to $214 million. Excluding restructuring and litigation costs, adjusted operating income is projected at $140 to $160 million.
The company also updated its per-share guidance. It now expects a loss per share of 58 to 61 cents, versus the earlier outlook of 53 to 56 cents. On an adjusted basis, earnings per share are still expected to land between 19 and 22 cents. Together, these revisions capture the accounting impact of the restructuring while showing how the core business is expected to perform without those items.
Positioning for the Long Term
This restructuring signals a shift toward tighter cost control and more efficient operations. Closing a primary distribution center, along with other actions in the plan, pushed estimated restructuring expenses higher—but management’s intent is steady: reduce complexity, trim fixed costs, and free the business to move faster.
While near-term losses widen under the revised outlook, Under Armour continues to emphasize its adjusted earnings profile, which excludes restructuring effects. The aim is sustained profitability and growth over time, not just a one-off reset. As one marker, the stock has held up, advancing 9.4% over the last three months, even as the overall industry fell 10.9% in the same span.
Highlighted Investment Opportunities
Alongside Under Armour’s changes, some investors may look at other names showing strength. Boot Barn Holdings, Inc. (NYSE: BOOT), Abercrombie & Fitch Co., and Steven Madden, Ltd. (NASDAQ: SHOO) are among those highlighted.
Boot Barn runs a distinctive retail chain centered on western and work footwear and apparel and currently carries a Zacks Rank of #1 (Strong Buy).
Abercrombie & Fitch, positioned in premium casual apparel, is also rated Zacks Rank #1, reflecting strong recent execution and growth potential.
Steven Madden, known for trend-forward footwear, holds a Zacks Rank of #2 (Buy), suggesting a favorable setup for investors watching the space.
Frequently Asked Questions
Why is Under Armour restructuring now?
The company is tightening its supply chain and simplifying operations to reduce costs and improve speed. The goal is a nimbler organization that can execute more efficiently and sustain growth over time.
How much will the restructuring cost, and what changed from the original plan?
Under Armour now expects pre-tax restructuring expenses of $140 to $160 million, up from the initial $70 to $90 million estimate. The increase reflects decisions such as closing a major distribution center and other transformation actions.
What exactly counts as cash versus non-cash costs here?
Cash-related costs could reach up to $75 million, including about $30 million for severance and benefits and $45 million for transformation initiatives. Non-cash charges are projected around $85 million, with roughly $7 million tied to severance and about $78 million to asset impairments affecting facilities, software, and other assets.
When will most of the restructuring expenses show up in results?
By the end of the first quarter of fiscal 2025, $34 million had been recorded ($19 million cash-related and $15 million non-cash). About two-thirds of the total restructuring charges are expected to be recognized by the end of fiscal 2025.
How has guidance changed for fiscal 2025?
Under Armour now projects an operating loss of $220 to $240 million, versus a prior loss range of $194 to $214 million. Excluding restructuring and litigation, adjusted operating income is expected at $140 to $160 million. The company anticipates a loss per share of 58 to 61 cents, and on an adjusted basis, earnings per share of 19 to 22 cents.
