(Reuters) -Under Armor expects its restructuring efforts to cost more than previously forecast, the sportswear maker said on Monday, sending its shares down 3% in aftermarket trading.
The company has been trying to turn around its operations and sharpen focus on its core businesses under a restructuring plan it unveiled in May, when CEO Kevin Plank said prioritizing too many areas of its product strategy had led to inefficiencies and strained resources.
Under Plank, who returned as CEO earlier this year after stepping down in 2019, is cutting back on promotions, inventory and headcount while focusing on selling more higher-margin items such as men’s clothing.
The Baltimore-based company expects to incur between $140 million and $160 million in pre-tax restructuring costs in fiscal 2025 and 2026. Last month, the company had forecast a charge of nearly $70 million to $90 million.
The higher costs are related to the company’s decision to abandon one of its distribution facilities in Rialto, California, Under Armor said.
The company’s shares have lost 15% so far this year as of Monday’s close. Peers Nike (NYSE:) and Lululemon Athletica (NASDAQ:) are down 27% and 50% respectively due to tepid demand and intense competition.
Under Armor expects a net loss of between 58 cents and 61 cents per share in fiscal 2025, down from its previous forecast of a loss of 53 cents to 56 cents per share.
However, the company maintained its adjusted earnings per share at 19 to 22 cents.
