UnderArmour stated that the company’s 2020 plan approved on March 31 includes estimated pre-tax restructuring and related corporate reorganization costs, totaling an estimated US$475-525 million.
The company announced in February that it was evaluating the company’s reorganization plan for 2020 to rebalance its cost structure and further improve the company’s profitability and cash liquidity. . Among these charges, approximately $290 million were related to the company’s New York flagship store, $25 million in employee severance and related benefit expenses, and $95 million in contract termination and other company restructuring plan expenses.
UnderArmour stated that as of March 31, it had incurred approximately US$300 million in corporate reorganization and other related expenses, including asset impairment losses at the New York flagship store. The remaining costs are expected to be incurred by the end of 2020. Under Armor plans to achieve pre-tax earnings of approximately $40-60 million in 2020.
The program approval comes ahead of an assessment of the likely impact of the Covid-19 pandemic on the company’s business, with UnderArmour now withdrawing its Q1 and full 2020 plans. expected outlook for the year.
Under Armor announces financial emergency measures to deal with the impact of the Covid-19 pandemic, including temporary layoffs of employees working in stores and outlet stores, and about 600 delivery employees in the United States Staff working at the center.
Under Armor said that since the outbreak of the crisis (referring to the closure of businesses), it has arranged to pay employees in stores and distribution centers full wages for four weeks, and the company will also pay additional bonuses to employees who continue to work in distribution centers.
At the same time, the emergency measures also include a 25% salary reduction for UnderArmour’s board of directors and all leadership above the executive vice president, which is effective immediately.
CEO Patrik Frisk said: During this unpredictable and challenging period, most Under Armor stores were forced to close, resulting in a significant decline in revenue. Although we have completed meaningful reforms in capital and finance over the past two years and have seen signs of economic recovery in the Asia-Pacific region, the sudden impact of the Covid-19 pandemic on the company’s business is still extremely severe, which has also forced us to make difficult decisions. options to ensure Under Armor can recover after the Covid-19 pandemic.
We do not make these decisions lightly, and the company is doing everything it can to minimize the impact of the Covid-19 pandemic on our employees. With the strength of the brand and the steps we have taken to respond, UnderArmour will weather this storm.
In its latest accounting quarterly statement, UnderArmour announced a net loss of US$15.3 million in the fourth quarter ended December 31, compared with a net income of US$4.2 million in the same period last year. Ten thousand U.S. dollars. However, revenue in the quarter was $1.44 billion, compared with $1.39 billion in the same period last year, a total increase of 4%.
