Company Also Announced the Completion of
its 2020 Restructuring Plan
BALTIMORE, May 6, 2022
/PRNewswire/ -- Under Armour, Inc. (NYSE: UA, UAA) today announced
unaudited financial results for its transition quarter ended
March 31, 2022. The company reports
its financial performance in accordance with accounting principles
generally accepted in the United States
of America ("GAAP"). This press release refers to "currency
neutral" and "adjusted" amounts, which are non-GAAP financial
measures described below under the "Non-GAAP Financial Information"
paragraph.
"Having successfully executed a multi-year transformation and
after delivering a record year in 2021 – we are continuing to serve
the needs of athletes amid an increasingly more uncertain
marketplace," said Under Armour President and CEO Patrik Frisk. "As global supply challenges and
emergent COVID-19 impacts in China
eventually normalize, we are confident that the strength of the
Under Armour brand coupled with our powerful growth strategy
positions us well to deliver sustainable, profitable returns to
shareholders over the long-term."
Transition Quarter Review
- Revenue was up 3 percent to $1.3
billion (up 4 percent currency neutral) compared to the
prior year.
-
- Wholesale revenue increased 4 percent to $829 million and direct-to-consumer revenue
increased 1 percent to $441 million,
driven by 2 percent growth in eCommerce, which represented 45
percent of the total direct-to-consumer business during the
quarter. Owned and operated store revenue growth was flat during
the quarter.
- North America revenue
increased 4 percent to $841 million
and international revenue increased 1 percent to $456 million (up 3 percent currency neutral).
Within the international business, revenue increased 18 percent in
EMEA (up 22 percent currency neutral), decreased 14 percent in
Asia-Pacific (down 13 percent
currency neutral), and decreased 6 percent in Latin America (down 5 percent currency
neutral).
- Apparel revenue increased 8 percent to $877 million. Footwear revenue decreased 4
percent to $297 million. Accessories
revenue decreased 18 percent to $97
million.
- Gross margin decreased 350 basis points to 46.5 percent
compared to the prior year, driven primarily by elevated freight
expenses.
- Selling, general & administrative expenses increased
16 percent to $594 million.
- Restructuring and impairment charges were $57 million.
- Operating loss was $46
million. Adjusted operating income was
$11 million.
- Net loss was $60 million.
Adjusted net loss was $3
million.
- Diluted loss per share was $0.13. Adjusted diluted loss per share was
$0.01.
- Inventory was down 3 percent to $824 million.
- Cash and Cash Equivalents were $1.0 billion at the end of the quarter, and no
borrowings were outstanding under the company's $1.1 billion revolving credit facility.
Fiscal Year End Change
As announced in February 2021,
Under Armour changed its fiscal year from December 31 to March 31. Following a three-month
transition period (January 1 –
March 31, 2022), Under Armour's
fiscal year 2023 will run from April 1,
2022, through March 31, 2023.
Consequently, there will be no fiscal year 2022.
Fiscal 2023 Outlook
Due to Under Armour's fiscal year change, the comparable
baseline period is April 1, 2021,
through March 31, 2022. Based on
current visibility, including ongoing supply chain challenges,
COVID-19 uncertainty, and inflationary trends, key points related
to Under Armour's fiscal year 2023 outlook include:
- Revenue is expected to increase 5 to 7 percent versus
the comparable baseline period of $5.7
billion, reflecting a mid-single-digit growth rate in
North America and a low-teens
growth rate in the international business. This expectation
includes approximately three percentage points of headwinds related
to our strategic decision to work with our vendors and customers to
cancel orders affected by capacity issues, supply chain delays, and
emergent COVID-19 impacts in China.
- Gross margin is expected to be down 150 to 200 basis
points compared to the baseline period's adjusted gross margin of
49.6 percent due to expected inflationary pressures on freight and
product costs, unfavorable channel mix, and changes in foreign
currency.
- Operating income is expected to reach $375 to $400
million versus the comparable baseline period adjusted
operating income of $424
million.
- Diluted earnings per share is expected to be between
$0.79 and $0.84 versus the comparable baseline period of
$0.47. This includes a $0.28 benefit related to a tax valuation
allowance release expected to be realized in the fourth quarter. Of
this $0.28 benefit, $0.16 of this amount is related to prior
restructuring charges; therefore, adjusted diluted earnings per
share is expected to be between $0.63 and $0.68.
This is comparable to the adjusted baseline period of $0.68.
2020 Restructuring Plan
The company also announced that it had concluded its 2020
restructuring plan with the recognition of $57 million during its transition quarter that
ended March 31, 2022. Under the
$600 million plan authorization,
$571 million of total charges were
recognized, including $197 million of
cash-related charges and $374 million
of non-cash-related charges.
Share Buyback Update
In February 2022, Under Armour
announced that its Board of Directors authorized the repurchase of
up to $500 million of its outstanding
Class C common stock, to be made over the following two years
through various methods, including open market, privately
negotiated, and accelerated share repurchase
transactions. An initial $300
million of repurchases was completed in early May through an
accelerated share repurchase plan. The company currently has
approximately $200 million remaining
under its repurchase authorization.
Conference Call and Webcast
Under Armour will hold its transition quarter conference
call and webcast today at approximately 8:30
a.m. Eastern Time. The call will be webcast live at
https://about.underarmour.com/investor-relations/financials and
will be archived and available for replay about three hours after
the live event.
Non-GAAP Financial Information
This press release refers to "currency neutral" and "adjusted"
results, as well as "adjusted" forward-looking estimates of the
company's results for its 2023 fiscal year ending March 31, 2023. Management believes this
information is useful to investors to compare the company's results
of operations period-over-period because it enhances visibility
into its actual underlying results, excluding these impacts.
Currency-neutral financial information is calculated to exclude
changes in foreign currency exchange rates. References to adjusted
financial measures exclude the impact of the company's 2020
restructuring plan, and related impairment charges, including
goodwill and related tax effects. Where applicable, adjusted net
income (loss) and adjusted diluted income (loss) per share exclude
the non-cash amortization of debt discount on the company's
convertible senior notes, any gain or loss on extinguishing the
company's convertible senior notes and related tax effects, and any
gain or loss from divestitures (including earn-outs) and related
tax effects. Management believes these adjustments are not
core to the company's operations. The reconciliation of non-GAAP
amounts to the most directly comparable financial measure
calculated according to GAAP is presented in supplemental financial
information furnished with this release. All per share amounts are
reported on a diluted basis. In addition, in connection with its
change in fiscal year-end from December 31
to March 31, Under Armour is presenting select non-GAAP
financial measures for the twelve-month period beginning on
April 1, 2021, and ending
March 31, 2022, to provide comparable
reference periods against the company's new fiscal 2023 year, which
began April 1, 2022, and ends on
March 31, 2023. These supplemental
non-GAAP financial measures should not be considered in isolation
and should be contemplated in addition to, and not as an
alternative for, the company's reported results prepared per GAAP.
Additionally, the company's non-GAAP financial information may not
be comparable to similarly titled measures reported by other
companies.
About Under Armour, Inc.
Under Armour, Inc., headquartered in Baltimore, Maryland, is a leading inventor,
marketer and distributor of branded athletic performance apparel,
footwear, and accessories. Designed to empower human performance,
Under Armour's innovative products and experiences are engineered
to make athletes better. For further information, please visit
http://about.underarmour.com.
Forward Looking Statements
Some of the statements contained in this press release
constitute forward-looking statements. Forward-looking statements
relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends and similar expressions
concerning matters that are not historical facts, such as
statements regarding our share repurchase program, our future
financial condition or results of operations, our prospects and
strategies for future growth, the impact of the COVID-19 pandemic
on our business and results of operations and the operations of our
suppliers and logistics providers, our plans to reduce our
operating expenses, anticipated charges and restructuring costs,
the development and introduction of new products, the
implementation of our marketing and branding strategies, and the
future benefits and opportunities from significant investments. In
many cases, you can identify forward-looking statements by terms
such as "may," "will," "should," "could," "expects," "plans,"
"anticipates," "believes," "estimates," "predicts," "outlook,"
"potential" or the negative of these terms or other comparable
terminology. The forward-looking statements contained in this press
release reflect our current views about future events and are
subject to risks, uncertainties, assumptions, and changes in
circumstances that may cause events or our actual activities or
results to differ significantly from those expressed in any
forward-looking statement. Although we believe that the
expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future events, results, actions,
activity levels, performance, or achievements. Readers are
cautioned not to place undue reliance on these forward-looking
statements. A number of important factors could cause actual
results to differ materially from those indicated by these
forward-looking statements, including, but not limited to: the
impact of the COVID-19 pandemic on our industry and our business,
financial condition and results of operations, including recent
impacts on the global supply chain; failure of our suppliers
or manufacturers to produce or deliver our products in a timely or
cost-effective manner; labor or other disruptions at ports or
our suppliers or manufacturers; changes in general economic or
market conditions that could affect overall consumer spending or
our industry; increased competition causing us to lose market
share or reduce the prices of our products or to increase our
marketing efforts significantly; fluctuations in the costs of
raw materials and commodities we use in our products and our supply
chain; changes to the financial health of our customers; our
ability to successfully execute our long-term strategies; our
ability to effectively drive operational efficiency in our business
and successfully execute any restructuring plans and realize their
expected benefits; our ability to effectively develop and
launch new, innovative and updated products; our ability to
accurately forecast consumer shopping and engagement preferences
and consumer demand for our products and manage our inventory in
response to changing demands; loss of key customers, suppliers
or manufacturers; our ability to further expand our business
globally and to drive brand awareness and consumer acceptance of
our products in other countries; our ability to manage the
increasingly complex operations of our global business; the
impact of global events beyond our control, including military
conflict; our ability to successfully manage or realize expected
results from significant transactions and investments; our
ability to effectively market and maintain a positive brand
image; our ability to effectively meet the expectations of our
stakeholders with respect to environmental, social and governance
practices; the availability, integration and effective operation of
information systems and other technology, as well as any potential
interruption of such systems or technology; any disruptions,
delays or deficiencies in the design, implementation or application
of our global operating and financial reporting information
technology system; our ability to attract key talent and
retain the services of our senior management and other key
employees; our ability to access capital and financing
required to manage our business on terms acceptable to us; our
ability to accurately anticipate and respond to seasonal or
quarterly fluctuations in our operating results; risks related
to foreign currency exchange rate fluctuations; our ability to
comply with existing trade and other regulations, and the potential
impact of new trade, tariff and tax regulations on our
profitability; risks related to data security or privacy
breaches; and our potential exposure to litigation and other
proceedings. The forward-looking statements contained in this
press release reflect our views and assumptions only as of the date
of this press release. We undertake no obligation to update any
forward-looking statement to reflect events or circumstances after
the statement's date or to reflect unanticipated events.
Under Armour,
Inc.
For the Three Months
Ended March 31, 2022, and 2021
(Unaudited; in
thousands, except per share amounts)
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
Three Months Ended March 31,
|
in '000s
|
2022
|
|
% of Net
Revenues
|
|
2021
|
|
% of Net
Revenues
|
Net revenues
|
$
1,300,945
|
|
100.0 %
|
|
$
1,257,195
|
|
100.0%
|
Cost of goods
sold
|
695,781
|
|
53.5 %
|
|
628,554
|
|
50.0%
|
Gross profit
|
605,164
|
|
46.5
%
|
|
628,641
|
|
50.0%
|
Selling, general and
administrative expenses
|
594,446
|
|
45.7 %
|
|
514,638
|
|
40.9%
|
Restructuring and
impairment charges
|
56,674
|
|
4.4 %
|
|
7,113
|
|
0.6%
|
Income (loss) from operations
|
(45,956)
|
|
(3.5)%
|
|
106,890
|
|
8.5%
|
Interest income
(expense), net
|
(6,154)
|
|
(0.5)%
|
|
(14,137)
|
|
(1.1)%
|
Other income (expense),
net
|
(51)
|
|
— %
|
|
(7,180)
|
|
(0.6)%
|
Income (loss) before income
taxes
|
(52,161)
|
|
(4.0)%
|
|
85,573
|
|
6.8%
|
Income tax expense
(benefit)
|
8,181
|
|
0.6 %
|
|
9,881
|
|
0.8%
|
Income (loss) from
equity method investments
|
732
|
|
0.1 %
|
|
2,060
|
|
0.2%
|
Net income (loss)
|
$
(59,610)
|
|
(4.6)%
|
|
$
77,752
|
|
6.2%
|
|
|
|
|
|
|
|
|
Basic net income (loss)
per share of Class A, B and C common stock
|
$
(0.13)
|
|
|
|
$
0.17
|
|
|
Diluted net income
(loss) per share of Class A, B and C common stock
|
$
(0.13)
|
|
|
|
$
0.17
|
|
|
Weighted average common shares outstanding Class A, B
and C common stock
|
Basic
|
471,425
|
|
|
|
456,014
|
|
|
Diluted
|
471,425
|
|
|
|
459,226
|
|
|
Under Armour,
Inc.
For the Three Months
Ended March 31, 2022, and 2021
(Unaudited; in
thousands)
|
|
NET REVENUES BY
PRODUCT CATEGORY
|
|
Three Months Ended
March 31,
|
in '000s
|
2022
|
|
2021
|
|
% Change
|
Apparel
|
$ 876,604
|
|
$ 810,041
|
|
8.2%
|
Footwear
|
296,696
|
|
309,047
|
|
(4.0)%
|
Accessories
|
96,803
|
|
117,396
|
|
(17.5)%
|
Total net
sales
|
1,270,103
|
|
1,236,484
|
|
2.7%
|
Licensing
revenues
|
26,602
|
|
21,657
|
|
22.8%
|
Corporate Other
(1)
|
4,240
|
|
(946)
|
|
NM
|
Total net revenues
|
$
1,300,945
|
|
$
1,257,195
|
|
3.5%
|
|
NET REVENUES BY
SEGMENT
|
|
Three Months Ended
March 31,
|
in '000s
|
2022
|
|
2021
|
|
% Change
|
North
America
|
$ 841,101
|
|
$ 805,727
|
|
4.4%
|
EMEA
|
228,056
|
|
193,883
|
|
17.6%
|
Asia-Pacific
|
181,908
|
|
210,220
|
|
(13.5)%
|
Latin
America
|
45,640
|
|
48,311
|
|
(5.5)%
|
Corporate Other
(1)
|
4,240
|
|
(946)
|
|
NM
|
Total net revenues
|
$
1,300,945
|
|
$
1,257,195
|
|
3.5%
|
INCOME (LOSS) FROM
OPERATIONS
|
|
Three Months Ended
March 31,
|
in '000s
|
2022
|
% of Net
Revenues (2)
|
|
2021
|
% of Net
Revenues (2)
|
North
America
|
$
154,084
|
18.3%
|
|
$
210,562
|
26.1%
|
EMEA
|
30,336
|
13.3%
|
|
26,686
|
13.8%
|
Asia-Pacific
|
5,464
|
3.0%
|
|
46,513
|
22.1%
|
Latin
America
|
6,343
|
13.9%
|
|
1,457
|
3.0%
|
Corporate Other
(1)
|
(242,183)
|
NM
|
|
(178,328)
|
NM
|
Income (loss) from operations
|
$
(45,956)
|
(3.5)%
|
|
$
106,890
|
8.5%
|
(1) Corporate Other
primarily includes net revenues from foreign currency hedge gains
and losses generated by entities within the Company's operating
segments but managed through the Company's central foreign exchange
risk management program and subscription revenues from digital
platforms. Corporate Other also includes expenses related to the
Company's central supporting functions.
|
|
(2)
Operating income (loss) percentage is calculated based on total
segment net revenues. The operating income (loss) percentage for
Corporate Other is not presented as a meaningful metric
(NM).
|
Under Armour,
Inc.
As of March 31,
2022, December 31, 2021, and March 31, 2021
(Unaudited; in
thousands)
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
in '000s
|
|
March 31,
2022
|
|
December 31,
2021
|
|
March 31,
2021
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
1,009,139
|
|
$
1,669,453
|
|
$
1,348,737
|
Accounts receivable,
net
|
|
702,197
|
|
569,014
|
|
696,287
|
Inventories
|
|
824,455
|
|
811,410
|
|
851,829
|
Prepaid expenses and
other current assets, net
|
|
297,034
|
|
286,422
|
|
260,865
|
Total current
assets
|
|
2,832,825
|
|
3,336,299
|
|
3,157,718
|
Property and equipment,
net
|
|
601,365
|
|
607,226
|
|
632,307
|
Operating lease
right-of-use assets
|
|
420,397
|
|
448,364
|
|
511,130
|
Goodwill
|
|
491,508
|
|
495,215
|
|
497,970
|
Intangible assets,
net
|
|
10,580
|
|
11,010
|
|
12,548
|
Deferred income
taxes
|
|
20,141
|
|
17,812
|
|
23,796
|
Other long term
assets
|
|
76,016
|
|
75,470
|
|
78,827
|
Total
assets
|
|
$
4,452,832
|
|
$
4,991,396
|
|
$
4,914,296
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
|
|
Accounts
payable
|
|
560,331
|
|
613,307
|
|
490,860
|
Accrued
expenses
|
|
317,963
|
|
460,165
|
|
311,905
|
Customer refund
liabilities
|
|
159,628
|
|
164,294
|
|
191,979
|
Operating lease
liabilities
|
|
134,833
|
|
138,664
|
|
160,918
|
Other current
liabilities
|
|
125,840
|
|
73,746
|
|
78,655
|
Total current liabilities
|
|
1,298,595
|
|
1,450,176
|
|
1,234,317
|
Long term debt, net of
current maturities
|
|
672,286
|
|
662,531
|
|
1,009,951
|
Operating lease
liabilities, non-current
|
|
668,983
|
|
703,111
|
|
801,292
|
Other long term
liabilities
|
|
84,014
|
|
86,584
|
|
98,537
|
Total liabilities
|
|
2,723,878
|
|
2,902,402
|
|
3,144,097
|
Total stockholders' equity
|
|
1,728,954
|
|
2,088,994
|
|
1,770,199
|
Total liabilities and
stockholders' equity
|
|
$
4,452,832
|
|
$
4,991,396
|
|
$
4,914,296
|
Under Armour,
Inc.
For the Three Months
Ended March 31, 2022, and 2021
(Unaudited; in
thousands)
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Three Months Ended March 31,
|
in '000s
|
2022
|
|
2021
|
Cash flows from operating
activities
|
|
|
|
Net income
(loss)
|
$
(59,610)
|
|
$
77,752
|
Adjustments to
reconcile net income (loss) to net cash used in operating
activities
|
|
|
|
Depreciation and amortization
|
34,960
|
|
35,512
|
Unrealized foreign currency exchange rate gain
(loss)
|
(8,585)
|
|
14,702
|
Loss on disposal of property and equipment
|
1,604
|
|
575
|
Non-cash restructuring and impairment charges
|
(1,871)
|
|
5,601
|
Amortization of bond premium and debt issuance
costs
|
549
|
|
5,273
|
Stock-based compensation
|
11,764
|
|
10,372
|
Deferred income taxes
|
(2,500)
|
|
(9)
|
Changes in reserves and allowances
|
(5,250)
|
|
(9,262)
|
Changes in operating assets and liabilities:
|
|
|
|
Accounts receivable
|
(131,988)
|
|
(170,493)
|
Inventories
|
(6,425)
|
|
49,246
|
Prepaid expenses and other
assets
|
(4,326)
|
|
22,295
|
Other non-current
assets
|
27,628
|
|
19,467
|
Accounts payable
|
(54,970)
|
|
(80,092)
|
Accrued expenses and other
liabilities
|
(122,589)
|
|
(121,841)
|
Customer refund
liabilities
|
(4,398)
|
|
(10,949)
|
Income taxes payable and
receivable
|
4,564
|
|
1,263
|
Net cash provided by
(used in) operating activities
|
(321,443)
|
|
(150,588)
|
Cash flows from investing
activities
|
|
|
|
Purchases of property
and equipment
|
(39,923)
|
|
(8,465)
|
Sale of property and
equipment
|
—
|
|
561
|
Net cash used in
investing activities
|
(39,923)
|
|
(7,904)
|
Cash flows from financing
activities
|
|
|
|
Common Shares
Repurchased
|
(300,000)
|
|
—
|
Employee taxes paid for
shares withheld for income taxes
|
(11,446)
|
|
(4,301)
|
Proceeds from exercise
of stock options and other stock issuances
|
934
|
|
858
|
Net cash provided by
(used in) financing activities
|
(310,512)
|
|
(3,443)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
11,134
|
|
(6,900)
|
Net increase in
(decrease in) cash, cash equivalents and restricted cash
|
(660,744)
|
|
(168,835)
|
Cash, cash equivalents and restricted
cash
|
|
|
|
Beginning of
period
|
1,682,870
|
|
1,528,515
|
End of
period
|
$
1,022,126
|
|
$
1,359,680
|
Under Armour,
Inc.
For the Three Months
March 31, 2022
(Unaudited)
|
|
The table below
presents the reconciliation of net revenue growth (decline)
calculated according to GAAP
to currency neutral net revenue a non-GAAP measure. See
"Non-GAAP Financial Information" above for
further information regarding the Company's use
of non-GAAP financial measures.
|
|
CURRENCY NEUTRAL NET
REVENUE GROWTH (DECLINE) RECONCILIATION
|
|
Three months
ended
March 31, 2022
|
Total Net Revenue
|
|
Net revenue growth -
GAAP
|
3.5%
|
Foreign exchange
impact
|
0.9%
|
Currency neutral net
revenue growth - Non-GAAP
|
4.4%
|
|
|
North America
|
|
Net revenue growth -
GAAP
|
4.4%
|
Foreign exchange
impact
|
—%
|
Currency neutral net
revenue growth - Non-GAAP
|
4.4%
|
|
|
EMEA
|
|
Net revenue growth -
GAAP
|
17.6%
|
Foreign exchange
impact
|
4.6%
|
Currency neutral net
revenue growth - Non-GAAP
|
22.2%
|
|
|
Asia-Pacific
|
|
Net revenue growth -
GAAP
|
(13.5)%
|
Foreign exchange
impact
|
1.0%
|
Currency neutral net
revenue growth - Non-GAAP
|
(12.5)%
|
|
|
Latin America
|
|
Net revenue growth -
GAAP
|
(5.5)%
|
Foreign exchange
impact
|
0.6%
|
Currency neutral net
revenue growth - Non-GAAP
|
(4.9)%
|
|
|
Total International
|
|
Net revenue growth -
GAAP
|
0.7%
|
Foreign exchange
impact
|
2.5%
|
Currency neutral net
revenue growth - Non-GAAP
|
3.2%
|
Under Armour,
Inc.
For the Three Months
March 31, 2022
(Unaudited; in
thousands, except per share amounts)
|
|
The tables below
present the reconciliation of the Company's condensed consolidated
statement of
operations presented in accordance with GAAP to certain
adjusted non-GAAP financial measures
discussed in this press release. See "Non-GAAP Financial
Information" above for further information
regarding the Company's use of non-GAAP financial
measures.
|
|
ADJUSTED OPERATING
INCOME (LOSS) RECONCILIATION
|
in '000s
|
|
Three months ended
March 31, 2022
|
GAAP loss from
operations
|
|
$
(45,956)
|
Add: Impact of
restructuring and impairment charges
|
|
56,674
|
Adjusted income from
operations
|
|
$
10,718
|
|
ADJUSTED NET INCOME
(LOSS) RECONCILIATION
|
in '000s
|
|
Three months ended
March 31, 2022
|
GAAP net
loss
|
|
$
(59,610)
|
Add: Impact of
restructuring and impairment charges
|
|
56,674
|
Add: Impact of
provision for income taxes
|
|
—
|
Adjusted net
loss
|
|
$
(2,936)
|
|
ADJUSTED DILUTED
EARNINGS (LOSS) PER SHARE RECONCILIATION
|
|
|
Three months ended
March 31, 2022
|
GAAP diluted net loss
per share
|
|
$
(0.13)
|
Add: Impact of
restructuring and impairment charges
|
|
0.12
|
Add: Impact of
provision for income taxes
|
|
—
|
Adjusted diluted net
loss per share
|
|
$
(0.01)
|
Under Armour,
Inc.
Outlook for the Year
Ended March 31, 2023
(Unaudited; in
millions, except per share amounts)
|
|
The table below
presents the reconciliation of the Company's fiscal 2023 outlook
presented in accordance
with GAAP to certain adjusted non-GAAP financial measures
discussed in this press release. See "Non-
GAAP Financial Information" above for further information
regarding the Company's use of non-GAAP
financial measures.
|
|
ADJUSTED DILUTED (LOSS) EARNINGS PER SHARE
RECONCILIATION
|
(in millions)
|
|
Year Ended March 31,
2023
|
|
|
Low end of
estimate
|
High end of
estimate
|
GAAP diluted net income
per share
|
|
$
0.79
|
$
0.84
|
Less: Impact of
provision for income taxes
|
|
(0.16)
|
(0.16)
|
Adjusted diluted net
income per share
|
|
$
0.63
|
$
0.68
|
|
(1) GAAP diluted net
income (loss) per share excludes any potential earn-out related to
the sale of the MyFitnessPal platform.
|
Under Armour,
Inc.
For the Twelve Months
Ended March 31, 2022
(Unaudited; in
thousands, except per share amounts)
|
|
As discussed above,
Under Armour has changed its fiscal year-end from December 31 to
March 31. The
tables below and on the following page present select financial
results and select non-GAAP financial
measures for the twelve-month period beginning on April 1, 2021,
and ending March 31, 2022.
We believe this recast presentation will be useful to the company's
investors because it provides
investors with comparable reference periods against the company's
new fiscal 2023 year (which began
April 1, 2022, and ends on March 31, 2023).
|
|
SELECT TWELVE MONTHS
ENDED MARCH 31, 2022, STATEMENTS OF OPERATIONS
DATA
|
in '000s
|
Three Months
Ended
June 30,
2021
|
|
Three Months
Ended
September 30,
2021
|
|
Three Months
Ended
December 31,
2021
|
|
Three Months
Ended
March 31,
2022
|
|
Twelve Months
Ended
March 31,
2022
|
|
% of Net
Revenues
|
Net revenues
|
$ 1,351,534
|
|
$ 1,545,532
|
|
$ 1,529,205
|
|
$ 1,300,945
|
|
$ 5,727,216
|
|
100.0%
|
Cost of goods
sold
|
682,713
|
|
757,428
|
|
753,272
|
|
695,781
|
|
2,889,194
|
|
50.4%
|
Gross profit
|
668,821
|
|
788,104
|
|
775,933
|
|
605,164
|
|
2,838,022
|
|
49.6%
|
Restructuring and
impairment charges
|
2,613
|
|
16,656
|
|
14,136
|
|
56,674
|
|
90,079
|
|
1.6%
|
Income (loss) from operations
|
121,205
|
|
172,064
|
|
86,131
|
|
(45,956)
|
|
333,444
|
|
5.8%
|
Interest income
(expense), net
|
(13,307)
|
|
(9,261)
|
|
(7,595)
|
|
(6,154)
|
|
(36,317)
|
|
(0.6)%
|
Other income (expense),
net
|
(38,494)
|
|
(29,476)
|
|
24,037
|
|
(51)
|
|
(43,984)
|
|
(0.8)%
|
Income (loss) before income
taxes
|
69,404
|
|
133,327
|
|
102,573
|
|
(52,161)
|
|
253,143
|
|
4.4%
|
Income tax expense
(benefit)
|
10,027
|
|
18,962
|
|
(6,798)
|
|
8,181
|
|
30,372
|
|
0.5%
|
Net income (loss)
|
$
59,207
|
|
$
113,444
|
|
$
109,657
|
|
$
(59,610)
|
|
$
222,698
|
|
3.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share of Class A, B and C common stock
|
$
0.13
|
|
$
0.24
|
|
$
0.23
|
|
$
(0.13)
|
|
$
0.47
|
|
|
Weighted average common shares outstanding Class A, B
and C common stock
|
|
|
Diluted
|
462,286
|
|
473,116
|
|
479,728
|
|
471,425
|
|
472,457
|
|
|
ADJUSTED GROSS
MARGIN RECONCILIATION
|
in '000s
|
Three Months
Ended
June 30,
2021
|
|
Three Months
Ended
September 30,
2021
|
|
Three Months
Ended
December 31,
2021
|
|
Three Months
Ended
March 31,
2022
|
|
Twelve Months
Ended
March 31,
2022
|
GAAP gross
margin
|
49.5%
|
|
51.0%
|
|
50.7%
|
|
46.5%
|
|
49.6%
|
Add: Impact of
restructuring charges recorded under cost of goods sold
|
3 bps
|
|
7 bps
|
|
— bps
|
|
— bps
|
|
— bps
|
Adjusted gross
margin
|
49.5%
|
|
51.0%
|
|
50.7%
|
|
46.5%
|
|
49.6%
|
Under Armour,
Inc.
For the Twelve Months
Ended March 31, 2022
(Unaudited; in
thousands, except per share amounts)
|
|
ADJUSTED OPERATING
INCOME RECONCILIATION
|
in '000s
|
Three Months
Ended
June 30,
2021
|
|
Three Months
Ended
September 30,
2021
|
|
Three Months
Ended
December 31,
2021
|
|
Three Months
Ended
March 31,
2022
|
|
Twelve Months
Ended
March 31,
2022
|
GAAP income (loss) from
operations
|
$
121,205
|
|
$
172,064
|
|
$
86,131
|
|
$
(45,956)
|
|
$
333,444
|
Add: Impact of
restructuring and impairment charges
|
2,613
|
|
16,656
|
|
14,136
|
|
56,674
|
|
90,079
|
Add: Impact of
restructuring charges recorded under cost of goods sold
|
408
|
|
107
|
|
—
|
|
—
|
|
515
|
Adjusted income (loss)
from operations
|
$
124,226
|
|
$
188,827
|
|
$
100,267
|
|
$
10,718
|
|
$
424,038
|
|
ADJUSTED OPERATING
MARGIN RECONCILIATION
|
in '000s
|
Three Months
Ended
June 30,
2021
|
|
Three Months
Ended
September 30,
2021
|
|
Three Months
Ended
December 31,
2021
|
|
Three Months
Ended
March 31,
2022
|
|
Twelve Months
Ended
March 31,
2022
|
GAAP operating
margin
|
9.0%
|
|
11.1%
|
|
5.6%
|
|
(3.5)%
|
|
5.8%
|
Add: Impact of
restructuring and impairment charges
|
0.2%
|
|
1.1%
|
|
0.9%
|
|
4.4%
|
|
1.6%
|
Adjusted operating
margin
|
9.2%
|
|
12.2%
|
|
6.5%
|
|
0.9%
|
|
7.4%
|
|
ADJUSTED NET
INCOME RECONCILIATION
|
in '000s
|
Three Months
Ended
June 30,
2021
|
|
Three Months
Ended
September 30,
2021
|
|
Three Months
Ended
December 31,
2021
|
|
Three Months
Ended
March 31,
2022
|
|
Twelve Months
Ended
March 31,
2022
|
GAAP net income
(loss)
|
$
59,207
|
|
$
113,444
|
|
$
109,657
|
|
$
(59,610)
|
|
$
222,698
|
Add: Impact of
restructuring and impairment charges
|
2,613
|
|
16,656
|
|
14,136
|
|
56,674
|
|
90,079
|
Add: Impact of
restructuring charges recorded under cost of goods sold
|
408
|
|
107
|
|
—
|
|
—
|
|
515
|
Add: Impact of
amortization of debt discount
|
4,568
|
|
2,251
|
|
898
|
|
—
|
|
7,717
|
Add: Impact of loss on
extinguishment of convertible senior notes
|
34,728
|
|
23,798
|
|
—
|
|
—
|
|
58,526
|
Add: Impact of earn-out
recorded in connection with the sale of
MyFitnessPal platform
|
—
|
|
—
|
|
(35,000)
|
|
—
|
|
(35,000)
|
Add: Impact of
provision for income taxes
|
8,498
|
|
(11,441)
|
|
(22,208)
|
|
—
|
|
(25,151)
|
Adjusted net income
(loss)
|
$
110,022
|
|
$
144,815
|
|
$
67,483
|
|
$
(2,936)
|
|
$
319,384
|
|
ADJUSTED DILUTED
EARNINGS PER SHARE RECONCILIATION
|
in '000s
|
Three Months
Ended
June 30,
2021
|
|
Three Months
Ended
September 30,
2021
|
|
Three Months
Ended
December 31,
2021
|
|
Three Months
Ended
March 31,
2022
|
|
Twelve Months
Ended
March 31,
2022
|
GAAP diluted net income
(loss) per share
|
$
0.13
|
|
$
0.24
|
|
$
0.23
|
|
$
(0.13)
|
|
$
0.47
|
Add: Impact of
restructuring and impairment charges
|
0.01
|
|
0.04
|
|
0.03
|
|
0.12
|
|
0.19
|
Add: Impact of
restructuring charges recorded under cost of goods sold
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Add: Impact of
amortization of debt discount
|
0.01
|
|
—
|
|
—
|
|
—
|
|
0.01
|
Add: Impact of loss on
extinguishment of convertible senior notes
|
0.08
|
|
0.05
|
|
—
|
|
—
|
|
0.13
|
Add: Impact of earn-out
recorded in connection with the sale of
MyFitnessPal platform
|
—
|
|
—
|
|
(0.07)
|
|
—
|
|
(0.07)
|
Add: Impact of
provision for income taxes
|
0.01
|
|
(0.02)
|
|
(0.05)
|
|
—
|
|
(0.05)
|
Adjusted diluted income
(loss) per share
|
$
0.24
|
|
$
0.31
|
|
$
0.14
|
|
$
(0.01)
|
|
$
0.68
|
Under Armour,
Inc.
As of March 31, 2022,
and 2021
|
|
COMPANY-OWNED &
OPERATED DOOR COUNT
|
|
|
March 31,
|
|
|
2022
|
|
2021
|
Factory
House
|
|
179
|
|
176
|
Brand House
|
|
18
|
|
16
|
North
America total doors
|
|
197
|
|
192
|
|
|
|
|
|
Factory
House
|
|
156
|
|
136
|
Brand House
|
|
87
|
|
98
|
International total doors
|
|
243
|
|
234
|
|
|
|
|
|
Factory
House
|
|
335
|
|
312
|
Brand House
|
|
105
|
|
114
|
Total
doors
|
|
440
|
|
426
|
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SOURCE Under Armour, Inc.