Under Armour eyes ‘low double-digit’ growth with new long-term strategic plan
Under Armour updated its turnaround plan with a new five-year strategy that is banking on its international and direct-to-consumer (DTC) businesses to put the company back on track in the long-term.
The athletic gear and apparel brand shared this new plan at an investor meeting held Wednesday at its global headquarters in Baltimore. According to the new plan, Under Armour expects revenue to return to a low double-digit growth rate by 2023, including a mid to high single-digit five-year compounded annual growth rate (CAGR), driven primarily by the company's International and DTC businesses. The company’ expects earnings per share to grow at a five-year CAGR of approximately 40%.
During the meeting, the company also updated its outlook for fiscal 2018. Under Armour’s operating loss is expected to be approximately $40 million to $55 million, compared to its previously reported $50 million to 55 million loss.
Excluding the impact of the restructuring efforts, adjusted diluted EPS is now expected to be 21 cents to 22 cents, versus the previous expectation of 19 cents to 22 cents. Year-end inventory for 2018 is now expected to be down at a mid-single-digit rate versus the previous expectation of flat to down slightly.
The company also revealed its initial outlook for fiscal 2019. Under Armour expects revenue to be up approximately 3% to 4%, reflecting a low double-digit percentage rate increase in the international business and relatively flat results for North America. Operating income is expected to reach $210 million to $230 million, and EPS is expected to be in the range of 31 cents to 33 cents.
To reach these goals, the company plans to accelerate its innovation agenda across athletic performance product and experiences, and will use data science and analytics to drive engagement, preference and consideration across its customer base. It also plans to continue investing in its largest long-term growth opportunities, including the company's international, direct-to-consumer, footwear and women's businesses.
The company will also focus efforts on more digital engagement and conversion, and retail excellence, and more selective and premium wholesale distribution. Under Armour expects these efforts to deliver balanced, sustainable earnings growth through margin expansion and cost efficiencies.
"Under Armour is designed for resilience and over the past two years, our global team has worked tirelessly to transform our business — operationally, strategically and culturally," said Under Armour chairman and CEO Kevin Plank. "With a distinct strategy engineered around a clear, uniquely defined consumer supported by a disciplined go-to-market process and data-driven demand mapping, we have never been more inspired, aligned and capable of achieving our goals."
The athletic gear and apparel brand shared this new plan at an investor meeting held Wednesday at its global headquarters in Baltimore. According to the new plan, Under Armour expects revenue to return to a low double-digit growth rate by 2023, including a mid to high single-digit five-year compounded annual growth rate (CAGR), driven primarily by the company's International and DTC businesses. The company’ expects earnings per share to grow at a five-year CAGR of approximately 40%.
During the meeting, the company also updated its outlook for fiscal 2018. Under Armour’s operating loss is expected to be approximately $40 million to $55 million, compared to its previously reported $50 million to 55 million loss.
Excluding the impact of the restructuring efforts, adjusted diluted EPS is now expected to be 21 cents to 22 cents, versus the previous expectation of 19 cents to 22 cents. Year-end inventory for 2018 is now expected to be down at a mid-single-digit rate versus the previous expectation of flat to down slightly.
The company also revealed its initial outlook for fiscal 2019. Under Armour expects revenue to be up approximately 3% to 4%, reflecting a low double-digit percentage rate increase in the international business and relatively flat results for North America. Operating income is expected to reach $210 million to $230 million, and EPS is expected to be in the range of 31 cents to 33 cents.
To reach these goals, the company plans to accelerate its innovation agenda across athletic performance product and experiences, and will use data science and analytics to drive engagement, preference and consideration across its customer base. It also plans to continue investing in its largest long-term growth opportunities, including the company's international, direct-to-consumer, footwear and women's businesses.
The company will also focus efforts on more digital engagement and conversion, and retail excellence, and more selective and premium wholesale distribution. Under Armour expects these efforts to deliver balanced, sustainable earnings growth through margin expansion and cost efficiencies.
"Under Armour is designed for resilience and over the past two years, our global team has worked tirelessly to transform our business — operationally, strategically and culturally," said Under Armour chairman and CEO Kevin Plank. "With a distinct strategy engineered around a clear, uniquely defined consumer supported by a disciplined go-to-market process and data-driven demand mapping, we have never been more inspired, aligned and capable of achieving our goals."