Under Armour it is downsizing its workforce with the firing of 50 corporate positions in “different functions”. It is learned from international press sources. “We made this decision to help reduce expenses to better align with our next chapter of growth, which is part of our continuous improvement plan toward profitability,” the retailer said in an emailed statement to The Baltimore Sun.
The layoffs come a few months after that Stephanie Linnartz assumed the position of president and CEO. In May, the CEO unveiled a three-year plan to increase profitability by strengthening the brand and sales growth in the United States and by improving the design of footwear, women’s apparel and “sportstyle” products.
The job cuts reflect both the new vision and priorities of an incoming CEO and recognition that difficult times likely lie ahead for Under Armor and other retailers amid high inflation, high interest rates and a potential recession, he said Karyl Leggioprofessor of finance at Loyola University Maryland.
Employees who were laid off will receive severance pay, health benefits and outplacement support, the company said. The company announced its latest layoff at the height of the coronavirus pandemic, when it said in September 2020 it planned to lay off around 600 global employees as part of a restructuring plan that was recently completed.
Under Armor closed the last fiscal year in May with 5.9 billion dollars in revenues (equal to 4.6 billion euros), up 3%. The fourth quarter ended with net revenues growing by 7.5% to 1.40 billion dollars against ‘steady’ estimates of 1.36 billion dollars.
However, the group said it expects flat or slightly up annual sales and profits for fiscal 2024, versus analyst expectations of 3.7 percent growth.
The company’s results were in contrast to industry peers Nike e Lululemon Athletica who have seen steady demand for their products over the past quarter despite overstocking.