Under Armour Inc. UAA, -3.37% UA, -4.00% stock fell nearly 3% in Wednesday trading after the athletic company announced an updated restructuring plan that includes higher charges.
“After further review, the Company has identified further opportunities and on September 2, 2020, the Company’s Board of Directors approved a $75 million increase to the restructuring plan, resulting in an updated 2020 restructuring plan of approximately $550 million to $600 million of total estimated pre-tax restructuring and related charges,” Under Armour said in a corporate filing.
The plan also includes 600 job cuts, which comes with a $30 million charge for benefits and severance. In February, Under Armour announced a plan that had the potential for $325 million to $425 million in pretax charges. That included $225 million to $250 million for an abandoned New York City flagship.
Under Armour says the majority of the charges will be incurred by the end of 2020. By June 30, the company had tallied $340 million in charges.
“Strong buy-rated Under Armour continues to take prudent steps to restructure the business during unprecedented times and position the story for clean, profitable growth in 2021 and beyond,” wrote Raymond James analysts in a note.
Under Armour stock has been halved over the year to date, down 50.8%, while the S&P 500 index SPX, +2.01% is up almost 6% for the period.
