Breaking Down Under Armour, Inc. (UAA) Financial Health: Key Insights for Investors

Are you an investor trying to understand the financial stability of Under Armour, Inc. (UAA)? Let's delve into the key insights from their fiscal year 2024 results. Despite a challenging retail environment, how has Under Armour managed its balance sheet, and what does this mean for its future performance? The company reported a 3% year-over-year decrease in revenue, totaling $5.7 billion, and a net income of $232 million, down 38%. With total assets of $4.63 billion and total liabilities of $2.64 billion as of December 2024, how effectively is Under Armour positioned to handle its debt of $595.2 million? Keep reading to uncover a detailed analysis of Under Armour's financial health and strategic outlook.

Under Armour, Inc. (UAA) Revenue Analysis

To assess the financial health of Under Armour, Inc. (UAA), a detailed look at its revenue streams is essential. This analysis includes breaking down the primary sources of revenue, examining year-over-year growth rates, understanding the contribution of different business segments, and identifying significant changes in revenue composition.

Under Armour, Inc.'s revenue is primarily derived from the following sources:

• Apparel: This segment includes performance apparel, sportswear, and licensed apparel.
• Footwear: This segment comprises performance footwear and outdoor footwear.
• Accessories: This includes hats, gloves, bags, and sports masks.
• Licensing: Revenue generated through licensing agreements for the Under Armour brand.
• Other: Includes connected fitness subscriptions and other miscellaneous revenue streams.

Analyzing Under Armour, Inc.’s financial performance involves understanding its revenue growth over time. Here's a look at their revenue trends:

In fiscal year 2024, Under Armour, Inc. reported a revenue of $5.7 billion. This represents a 3% decrease compared to the $5.9 billion reported in the previous fiscal year. The decrease was primarily driven by a 4% decline in North America, partially offset by an 8% increase in international markets.

Here's a more detailed breakdown of revenue by segment for the fiscal year 2024:

• Apparel: $3.7 billion, a slight decrease compared to the previous year.
• Footwear: $1.4 billion, also showing a slight decrease.
• Accessories: $500 million, reflecting a minor decrease.
• North America: $3.8 billion, a 4% decrease.
• International: $1.9 billion, an 8% increase, with significant growth in EMEA and APAC regions.

The following table provides an overview of Under Armour, Inc.'s revenue by segment and geography for fiscal year 2024:

Significant shifts in Under Armour, Inc.'s revenue streams in fiscal year 2024 include the decline in North America, which was offset by growth in international markets. This indicates a strategic pivot towards expanding its global presence to mitigate domestic challenges.

To gain further insights into Under Armour, Inc.'s investor profile, explore: Exploring Under Armour, Inc. (UAA) Investor Profile: Who’s Buying and Why?

Under Armour, Inc. (UAA) Profitability Metrics

Assessing Under Armour, Inc. (UAA)'s financial health requires a close examination of its profitability metrics. These metrics provide insights into the company's ability to generate earnings relative to its revenue, assets, and equity. Key profitability measures include gross profit margin, operating profit margin, and net profit margin.

Gross profit reveals the revenue remaining after deducting the cost of goods sold (COGS). Under Armour's gross profit for the fiscal year 2024 was $2.58 billion. The gross margin, calculated as gross profit divided by revenue, indicates the efficiency of production and pricing strategies. For 2024, Under Armour's gross margin stood at 46.7%, reflecting a 220 basis point increase compared to the previous year. This improvement was primarily driven by benefits from pricing and disciplined promotional activities, as well as supply chain efficiencies.

Operating profit offers a view of earnings before interest and taxes (EBIT). Under Armour's operating income for fiscal year 2024 was reported at $334 million. The operating margin, calculated by dividing operating income by net revenue, showcases the company's profitability from its core operations, excluding the effects of interest and taxes. The company's operating margin increased to 6.0%.

Net profit represents the income remaining after all expenses, including interest and taxes, have been deducted from revenue. The net income for 2024 was $233 million, or $0.52 per diluted share. Net profit margin, calculated as net income divided by revenue, provides a comprehensive measure of overall profitability. Under Armour's net profit margin for the fiscal year 2024 was 4.2%.

Here's a summary of Under Armour's profitability metrics for 2024:

• Gross Profit: $2.58 billion
• Gross Margin: 46.7%
• Operating Income: $334 million
• Operating Margin: 6.0%
• Net Income: $233 million
• Net Profit Margin: 4.2%

Analyzing these trends over time provides valuable insights into Under Armour's ability to sustain and improve its profitability. Comparing these ratios with industry averages helps to benchmark the company's performance against its competitors. Further analysis of operational efficiency, such as cost management and gross margin trends, can provide a deeper understanding of the factors driving Under Armour's profitability.

A detailed overview of Under Armour, Inc. (UAA)'s financial health can be found at: Breaking Down Under Armour, Inc. (UAA) Financial Health: Key Insights for Investors

Under Armour, Inc. (UAA) Debt vs. Equity Structure

Understanding Under Armour, Inc. (UAA)'s financial health requires a close examination of its debt and equity structure. This involves assessing the levels of debt the company carries, comparing its debt-to-equity ratio against industry benchmarks, and analyzing recent financing activities.

As of March 31, 2024, Under Armour, Inc. (UAA) reported total debt of $642.5 million. This consists of:

• Long-term debt: $641.2 million
• Short-term debt: $1.3 million

The company's debt-to-equity ratio, a key metric for evaluating financial leverage, stood at 33.7% as of March 31, 2024. This ratio indicates the proportion of debt and equity Under Armour, Inc. (UAA) uses to finance its assets. Analyzing this ratio in comparison to industry standards provides insights into the company's financial risk profile.

Here is a snapshot of Under Armour, Inc. (UAA)'s debt structure:

In balancing debt and equity, Under Armour, Inc. (UAA) strategically manages its capital structure to fund growth initiatives and operational needs. The company's approach to financing reflects its overall financial strategy and risk management practices. More insights into the company’s strategic vision can be found at Mission Statement, Vision, & Core Values of Under Armour, Inc. (UAA).

Under Armour, Inc. (UAA) Liquidity and Solvency

When evaluating Under Armour, Inc.'s (UAA) financial health, understanding its liquidity and solvency is crucial for investors. Liquidity refers to the company's ability to meet its short-term obligations, while solvency indicates its ability to meet long-term obligations. Let's delve into key metrics and trends that define Under Armour, Inc.'s (UAA) liquidity position.

Current and Quick Ratios:

The current and quick ratios are fundamental indicators of a company's liquidity. The current ratio measures a company's ability to pay off its current liabilities with its current assets. The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A higher ratio generally indicates a stronger liquidity position.

As of December 31, 2024, Under Armour, Inc. (UAA) reported a current ratio of 2.3. This means that Under Armour, Inc. (UAA) has $2.30 of current assets for every $1.00 of current liabilities. The quick ratio for the same period was 1.4, indicating that Under Armour, Inc. (UAA) has $1.40 of liquid assets available to cover each $1.00 of current liabilities. These ratios suggest a healthy liquidity position for Under Armour, Inc. (UAA).

Analysis of Working Capital Trends:

Working capital, calculated as current assets minus current liabilities, is another important measure of liquidity. Monitoring the trends in working capital can provide insights into a company's ability to manage its short-term resources effectively. As of December 31, 2024, Under Armour, Inc. (UAA) had a working capital of $1.54 billion, compared to $1.43 billion the previous year.

Cash Flow Statements Overview:

An examination of Under Armour, Inc.’s (UAA) cash flow statements offers a deeper understanding of its liquidity. The cash flow statement is divided into three sections:

• Cash flow from operating activities
• Cash flow from investing activities
• Cash flow from financing activities

For the fiscal year 2024, Under Armour, Inc. (UAA) reported net cash provided by operating activities of $478.9 million. This indicates the company's ability to generate cash from its core business operations. Investing activities resulted in a net cash outflow of $98.2 million, primarily due to capital expenditures. Financing activities showed a net cash outflow of $299.4 million, mainly from the repurchase of Class C common stock.

Potential Liquidity Concerns or Strengths:

Based on the analysis, Under Armour, Inc. (UAA) exhibits several liquidity strengths:

• Healthy current and quick ratios
• Positive working capital
• Positive cash flow from operating activities

These indicators suggest that Under Armour, Inc. (UAA) is well-positioned to meet its short-term obligations and fund its operations. However, investors should continue to monitor these metrics and consider other factors, such as industry trends and macroeconomic conditions, when assessing Under Armour, Inc.'s (UAA) overall financial health.

Under Armour, Inc. (UAA) Valuation Analysis

Determining whether Under Armour, Inc. (UAA) is overvalued or undervalued involves analyzing several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, and analyst consensus.

As of April 2025, up-to-date valuation ratios and financial data for Under Armour's 2024 fiscal year are essential for an accurate assessment. These metrics provide insights into how the market values Under Armour relative to its earnings, book value, and operational cash flow. Let's delve deeper into each of these aspects:

Price-to-Earnings (P/E) Ratio: The P/E ratio indicates how much investors are willing to pay for each dollar of Under Armour’s earnings. A higher P/E ratio might suggest overvaluation, while a lower one could indicate undervaluation, relative to industry peers or Under Armour’s historical averages.

Price-to-Book (P/B) Ratio: The P/B ratio compares Under Armour’s market capitalization to its book value of equity. It can help investors determine whether the stock price is justified by the company's net asset value. A lower P/B ratio may suggest that the stock is undervalued.

Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The EV/EBITDA ratio provides a more comprehensive valuation measure than the P/E ratio, as it takes into account Under Armour’s debt and cash positions. A lower EV/EBITDA ratio typically suggests that the company is undervalued compared to its operational cash flow.

Stock Price Trends: Analyzing Under Armour’s stock price trends over the last 12 months (or longer) can reveal important patterns and market sentiment. Significant price appreciation might suggest that the stock is becoming overvalued, while a decline could indicate undervaluation or potential concerns about the company's performance. Keep an eye on the overall market conditions and industry-specific factors that may influence these trends.

Dividend Yield and Payout Ratios: As of the latest data, Under Armour does not offer a dividend. Therefore, dividend yield and payout ratios are not applicable in this valuation analysis.

Analyst Consensus: Monitoring analyst ratings and price targets can provide additional insights into Under Armour’s valuation. A consensus rating of 'buy' might suggest that analysts believe the stock is undervalued, while a 'sell' rating could indicate overvaluation. It's crucial to consider the range of opinions and the rationale behind them.

For a deeper dive into Under Armour's investors and their motivations, check out: Exploring Under Armour, Inc. (UAA) Investor Profile: Who’s Buying and Why?

Under Armour, Inc. (UAA) Risk Factors

Here are some key risks that Under Armour, Inc. (UAA) faces, impacting its financial health:

Industry Competition: The athletic apparel, footwear, and accessories market is highly competitive. Under Armour faces intense competition from both established companies and new entrants. Competitors with greater financial resources may be able to compete more effectively, potentially leading to loss of market share, reduced prices, and increased marketing expenses for Under Armour. Intense competition in the athletic apparel industry poses a threat as well. Intense competition may cause Under Armour to lose market share or reduce the prices of its products or to increase its marketing efforts significantly.

Market Conditions: Under Armour faces challenges related to consumer shopping and engagement preferences, which can impact their ability to forecast accurately and maintain profitability. A potential economic downturn could affect consumer spending, and changing consumer preferences and fashion trends also pose risks. The company's success depends on its ability to anticipate and respond to these changing market dynamics.

Regulatory Changes: Under Armour is subject to existing trade and other regulations, and the potential impact of new trade, tariff, and tax regulations on their profitability. US-China trade tensions continue to impact sourcing and manufacturing costs. For example, apparel imports from China with a 25% tariff could increase annual expenses by $17.3 million, and footwear components with a 15% tariff could increase manufacturing costs by $9.6 million. The company operates manufacturing facilities in several countries, including Vietnam, China, Jordan, and the United States, incurring compliance costs in each location.

Operational Risks: Under Armour is currently undergoing a restructuring plan to improve financial and operational efficiencies. In May 2024, the company announced this plan, which was later updated in September 2024 to include the closure of a distribution center in Rialto, California. The total pre-tax restructuring and related charges are expected to be between $140 million and $160 million, with up to $75 million in cash-related charges and $85 million in non-cash charges. As of June 30, 2024, the company had already incurred approximately $34 million in restructuring charges. Additionally, Under Armour faces risks related to data security and privacy breaches.

• Streamlining product lines by cutting the SKU count by 25% to focus on men's apparel.
• Enhancing go-to-market capabilities with faster product launches and exclusive products.
• Reallocating marketing expenditures to align with the product and brand strategy for fiscal year 2026.

Financial Risks: Under Armour's financial leverage has fluctuated, averaging 2.5x between fiscal years 2020 and 2024. It peaked at 3.0x in December 2020 and hit a low of 2.2x in March 2024. Declining sales across various channels and regions, along with challenges in the Asia-Pacific market and ongoing North American market resets, pose financial risks. Fluctuations in raw material and commodity costs, including labor, also affect the supply chain. Under Armour's ability to drive operational efficiency is crucial for managing these financial risks.

Strategic Risks: Under Armour faces strategic risks related to its ability to successfully execute its long-term strategies. A key strategic shift involves premiumizing its brand by developing and marketing higher-quality products. This shift aims to enhance brand perception and improve EBITDA and EPS performance. However, the company anticipates a low double-digit revenue decline in fiscal year 2025, with a more pronounced 15-17% dip in North America. The success of Under Armour's turnaround efforts depends on effective execution of its strategic initiatives and its ability to adapt to changing market conditions.

Mitigation Strategies: To mitigate these risks, Under Armour is focused on:

• Improving product quality and storytelling to enhance consumer experiences.
• Expanding its store fleet in the APAC region.
• Reducing discounting and focusing on digital platforms, team sports, and premium wholesale relationships in North America.
• Optimizing its supply chain network.
• Increasing marketing investments to amplify brand awareness.

In May 2024, Under Armour's Board of Directors authorized a $500 million stock repurchase plan. The company is also committed to reducing its environmental impact by transitioning to 100% renewable energy in owned and operated facilities by 2030 and achieving net-zero greenhouse gas emissions by 2050.

Read more about Under Armour's financial health: Breaking Down Under Armour, Inc. (UAA) Financial Health: Key Insights for Investors

Under Armour, Inc. (UAA) Growth Opportunities

Under Armour, Inc. (UAA) faces a dynamic landscape of growth opportunities driven by product innovation, strategic market expansions, and key partnerships. The company's ability to capitalize on these drivers will be crucial for future revenue growth and maintaining a competitive edge.

Key growth drivers for Under Armour, Inc. (UAA) include:

• Product Innovation: Focusing on developing innovative athletic apparel, footwear, and accessories that cater to athletes' evolving needs and preferences.
• Market Expansion: Expanding its presence in key international markets, particularly in Asia-Pacific and Latin America, to tap into new customer bases.
• Strategic Partnerships: Collaborating with athletes, influencers, and other brands to enhance brand visibility and credibility.

Future revenue growth projections and earnings estimates for Under Armour, Inc. (UAA) are influenced by several factors. For example, Under Armour's fiscal year 2024 revenue increased by 2.6% to $5.9 billion. Looking ahead, the company's strategic initiatives and partnerships are expected to play a significant role in driving future growth.

Strategic initiatives and partnerships that may drive future growth include:

• Focus on Digital: Enhancing its digital platform and e-commerce capabilities to improve customer engagement and drive online sales.
• Sustainability Initiatives: Implementing sustainable practices and developing eco-friendly products to appeal to environmentally conscious consumers.
• Brand Collaborations: Partnering with other brands to create unique product offerings and expand its reach.

Under Armour, Inc. (UAA) possesses several competitive advantages that position the company for growth:

• Brand Recognition: Strong brand recognition and reputation among athletes and consumers.
• Innovative Products: A history of developing innovative and performance-enhancing products.
• Global Distribution Network: A well-established global distribution network that enables it to reach customers worldwide.

Here is a table summarizing Under Armour, Inc. (UAA)'s financial performance and growth estimates:

Understanding Under Armour, Inc. (UAA)'s mission, vision, and core values provides additional context for its strategic direction. More information can be found here: Mission Statement, Vision, & Core Values of Under Armour, Inc. (UAA).