Under Armour Inc. (NYSE: UAA) said on Thursday that its restructuring program will now cost more than it previously expected: It plans to cut about 400 jobs, or about 3% of its global workforce, by March.
Under Armour shares jumped nearly 7% in midday trading.
The athletic apparel Company known for its compression T-shirts and performance clothing has been struggling as competition heats up, and rivals like Nike and Adidas have gained significant market share. Some retail watchers have also criticized the Company as it expanded to new retail channels, saying these steps hurt the exclusivity of its brand.
The Baltimore-based company now expects its pretax restructuring charges for the year to be between about USD 200 Million and USD 220 Million, with the workforce reductions resulting in about USD 10 Million in severance costs. The Company had expected restructuring charges for the year to be between USD 190 Million and USD 210 Million. The restructuring has also included contract and facility lease terminations as well as inventory control efforts.
Sales outside of North America accounted for 26% of the Company’s total in the second quarter and had sharply stronger sales growth in the period as well. Sales outside of North America rose 28%, compared with North American sales rising 2%.
The Company also raised the lower end of its fiscal 2018 earnings forecast, with estimates now in the range of 16 cents to 19 cents per share on an adjusted basis. Previously, it put earnings at 14 cents to 19 cents per share after adjustments.
"This redesign will help simplify the organization for smarter, faster execution, capture additional cost efficiencies, and shift resources to drive greater operating leverage as we move into 2019 and beyond," Chief Financial Officer David Bergman said in a statement.