Under Armour : FY 2024 Annual Report

ANNUAL REPORT

LETTER FROM THE CEO

JUNE 27, 2024

DEAR SHAREHOLDERS,

Since Under Armour's founding nearly 30 years ago, our goal has been to deliver industry-leading, innovative products that empower athletes to perform at the highest levels of competition. With a heritage centered on athletic performance, Under Armour is one of only a few podium brands with the credibility of being recognized worldwide as an authentic, on-field, court, and pitch performance brand. It is a privilege we do not take for granted and represents an immense responsibility. While our strengths are undeniable, we have been inconsistent in recent years in how we show up in the market, articulate stories to consumers, and deliver industry-leading products every day.

At our best, we can deliver incredible innovations and storytelling. In our fourth quarter, we delivered six new footwear drops - Infinite Pro, Infinite Elite, SlipSpeed Mega, and Apparition in running, new Curry colorways at the NBA All-Star game, and Drive Pro in golf, yet we showed up quietly. However, at this year's Boston Marathon, UA athlete Sharon Lokedi took her third podium wearing the Velociti Elite 2 running shoes

- and ahead of the race, our team did a fantastic job flooding social media channels with our messaging. These examples, our SlipSpeed footwear franchise, Unstoppable collection, and women's Meridian products, demonstrate the power of fully aligning our product and marketing engines.

Moreover, Under Armour delivers some of our industry's highest-performing innovations and materials sciences, including moisture-wicking, body temperature management, cushioning, compression, and sustainable fabrics. Still, we've not consistently communicated our product advantages to athletes - what it is, what it does, and how it will make them better.

This will change. If a product is important enough for us to develop and release, it's important enough to celebrate with storytelling - if not, we won't make it. That is a crucial focus of our work as we reconstitute our brand, particularly in North America, moving forward with clarity around our purpose of empowering those who strive for more.

In fiscal 2024, we faced a challenging macroeconomic environment and increasingly competitive industry dynamics, which included historically elevated inventories and a constant drumbeat of promotions. Amid these conditions, our revenue declined 3% to $5.7 billion, primarily due to challenges in our North American business. Even so, our gross margin improved 130 basis points to 46.1%, driven mainly by supply chain benefits, and our adjusted operating income and adjusted diluted earnings per share were in line with the outlook we gave at the beginning of the year.

FISCAL 2024 ANNUAL REPORT

Due to a confluence of factors, including lower wholesale channel demand and inconsistent execution across our business, we are seizing this critical moment to make proactive decisions to build a premium positioning for our brand, which will pressure our top line in the mid-term. Under Armour embraces its underdog spirit, and we have the grit and determination to tackle this next chapter. The output of this work will take time, but we are moving with urgency to deliver consistently across our business. We have refined and simplified our Protect This House strategy to concentrate on three main priorities to reposition our business: achieving more, doing less, and focusing on our core fundamentals. This is what you can expect from us:

1. Delivering Products and Storytelling. We will prioritize our core performance and technical innovation competency to avoid competing on price, particularly in North America. To do this, we are editing our product offerings and working to better communicate our product advantages to athletes in the near term - doing more with less and being more intentional with our future offerings by focusing on "better" and "best" level products and driving greater operational efficiency. While a critical mass of elevated offerings won't fully come to market until the fall/ winter 2025 season, in the next 18 months, we plan to reduce our SKU/style count by 25% and add greater flexibility and speed to our go-to-market capabilities. We are also prioritizing our core men's apparel business, reorganizing our product and marketing teams around our largest revenue sports categories, and ensuring that our authenticator of Team Sports, like basketball, football, and American football, is front and center to maintain a relationship with our targeted 16-24-year-oldathletes. Brands are built with consistency, and we will strengthen our brand in this chapter.
2. Running Smarter Plays. We allowed ourselves to become overly complex in the last few years. We will be more intentional, simplifying our design language and how we operate. We will streamline our operating model, modernize our supply chain and planning processes, and optimize our cost base to drive greater efficiencies and, ultimately, better profitability. This includes assigning single points of accountable leadership within our product, marketing, and sales organizations to stay fully aligned as we deliver go-to-marketstrategies focused on our athletes' needs, giving us greater visibility into the category and product performance critical to creating greater agility and adaptation.

FISCAL 2024 ANNUAL REPORT

3. Elevating Consumer work to elevate experience, become build better

is of particular address our North We will make our

a premium platform reducing promotions, and harnessing

our UA Rewards

a companion piece increase the when we release becoming a brand performance solutions

never knew they needed and once they've tried them, cannot imagine living without them. We also have a meaningful opportunity to elevate our retail consumer experience at our Brand Houses, which must become a premium showcase for UA, and at our Factory Houses, where we see additional opportunities for margin expansion and a better, more curated expression for our consumers. This North American focus does not mean we're taking our foot off the gas in international markets, which remain an essential part of our business. We will maintain high-quality sales across all channels and protect our premium brand positioning in every region worldwide.

With these priorities, we are leaning into the things that work well and reducing the complexity that has distracted us from our core mission - to make athletes better. We have a strengthened and experienced management team, the talent and determination to deliver on these objectives, and a strong balance sheet, as evidenced by our Board's recent approval of a three- year, $500 million Class C share buyback program.

Our strategy will take time to come to fruition. As we execute against our goals - we will remain disciplined in our efforts to strengthen Under Armour, provide stability, and focus on consistent execution to deliver better results for all stakeholders. I am honored to be back leading this iconic brand, and I am excited to bring a clear sense of purpose and 100% commitment to unlocking our full potential and generating more consistent value creation in the future. While on this journey, we will continue to care for the Under Armour brand, our teammates, and our communities, including our home in Baltimore, as we move into our new headquarters later this year.

Thank you for your continued support.

KEVIN PLANK

President & Chief Executive Officer

Under Armour, Inc.

FISCAL 2024 ANNUAL REPORT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

Form 10-K

______________________________________

(Mark One)

• ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2024

or

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-33202

______________________________________

UNDER ARMOUR, INC.

(Exact name of registrant as specified in its charter)

______________________________________

Maryland	52-1990078
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
1020 Hull Street
Baltimore, Maryland 21230	[phone]
(Address of principal executive offices) (Zip Code)	(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Class A Common Stock	UAA	New York Stock Exchange
Class C Common Stock	UA	New York Stock Exchange
(Title of each class)	(Trading Symbols)	(Name of each exchange on which registered)
	Securities registered pursuant to Section 12(g) of the Act:
	None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes	☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes	☐ No ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☑

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Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).☐(1)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of September 30, 2023, the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market value of the registrant's Class A Common Stock and Class C Common Stock held by non-affiliates was $1,290,282,890 and $1,228,521,026, respectively.

As of May 15, 2024 there were 188,802,043 shares of Class A Common Stock, 34,450,000 shares of Class B Convertible Common Stock and 213,245,598 shares of Class C Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Under Armour, Inc.'s Proxy Statement for the Annual Meeting of Stockholders to be held on September 4, 2024 are incorporated by reference in Part III of this Annual Report on Form 10-K.

1. Refer to Part III, Item 11 of this Annual Report on Form 10-K for additional information.

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	UNDER ARMOUR, INC.
	ANNUAL REPORT ON FORM 10-K
	TABLE OF CONTENTS
PART I
	Forward Looking Statements
Item 1.	Business
	General
	Products
	Marketing and Promotion
	Sales and Distribution
	Product Design and Development
	Sourcing, Manufacturing and Quality Assurance
	Inventory Management
	Intellectual Property
	Competition
	Sustainability
	Human Capital Management
	Information About Our Executive Officers
	Available Information
Item 1A.	Risk Factors
Item 1B.	Unresolved Staff Comments
Item 1C.	Cybersecurity
Item 2.	Properties
Item 3.	Legal Proceedings
Item 4.	Mine Safety Disclosures
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
Item 6.	Reserved
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk
Item 8.	Financial Statements and Supplementary Data
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A.	Controls and Procedures
Item 9B.	Other Information
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspection
PART III
Item 10.	Directors, Executive Officers and Corporate Governance
Item 11.	Executive Compensation
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
Item 13.	Certain Relationships and Related Transactions, and Director Independence
Item 14.	Principal Accountant Fees and Services
PART IV
Item 15.	Exhibits and Financial Statement Schedules
Item 16.	Form 10-K Summary

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PART I.

FORWARD-LOOKING STATEMENTS

Some of the statements contained in this Annual Report on Form 10-K constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, such as statements regarding our share repurchase program, our future financial condition or results of operations, our prospects and strategies for future growth, potential restructuring efforts, including the scope of these restructuring efforts and the amount of potential charges and costs, the timing of these measures and the anticipated benefits of our restructuring plans, expectations regarding promotional activities, freight, product cost pressures and foreign currency impacts, the impact of global economic conditions and inflation on our results of operations, our liquidity and use of capital resources, the development and introduction of new products, the implementation of our marketing and branding strategies, the future benefits and opportunities from significant investments and the impact of litigation or other proceedings. In many cases, you can identify forward-looking statements by terms such as "may," "will," "could," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "outlook," "potential" or the negative of these terms or other comparable terminology.

The forward-looking statements contained in this Annual Report on Form 10-K reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause events or our actual activities or results to differ significantly from those expressed in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. A number of important factors could cause actual results to differ materially from those indicated by these forward-looking statements, including, but not limited to, those factors described in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" herein. These factors include without limitation:

• changes in general economic or market conditions, including increasing inflation, that could affect overall consumer spending or our industry;
• increased competition causing us to lose market share or reduce the prices of our products or to increase our marketing efforts significantly;
• fluctuations in the costs of raw materials and commodities we use in our products and our supply chain (including labor);
• our ability to successfully execute our long-term strategies;
• our ability to effectively drive operational efficiency in our business;
• changes to the financial health of our customers;
• our ability to effectively develop and launch new, innovative and updated products;
• our ability to accurately forecast consumer shopping and engagement preferences and consumer demand for our products and manage our inventory in response to changing demands;
• our ability to successfully execute any potential restructuring plans and realize their expected benefits;
• loss of key customers, suppliers or manufacturers;
• our ability to further expand our business globally and to drive brand awareness and consumer acceptance of our products in other countries;
• our ability to manage the increasingly complex operations of our global business;
• the impact of global events beyond our control, including military conflicts;
• the impact of global or regional public health emergencies on our industry and our business, financial condition and results of operations, including impacts on the global supply chain;
• our ability to successfully manage or realize expected results from significant transactions and investments;
• our ability to effectively market and maintain a positive brand image;
• our ability to attract key talent and retain the services of our senior management and other key employees;
• our ability to effectively meet regulatory requirements and stakeholder expectations with sustainability and social matters;

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• the availability, integration and effective operation of information systems and other technology, as well as any potential interruption of such systems or technology;
• any disruptions, delays or deficiencies in the design, implementation or application of our global operating and financial reporting information technology system;
• our ability to access capital and financing required to manage our business on terms acceptable to us;
• our ability to accurately anticipate and respond to seasonal or quarterly fluctuations in our operating results;
• risks related to foreign currency exchange rate fluctuations;
• our ability to comply with existing trade and other regulations, and the potential impact of new trade, tariff and tax regulations on our profitability;
• risks related to data security or privacy breaches;
• our ability to remediate the material weaknesses discussed elsewhere in this Annual Report on Form 10-K; and
• our potential exposure to and the financial impact of litigation and other proceedings, including those legal proceedings discussed elsewhere in this Annual Report on Form 10-K.

The forward-looking statements contained in this Annual Report on Form 10-K reflect our views and assumptions only as of the date of this Annual Report on Form 10-K. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

Throughout this Annual Report on Form 10-K: (i) the term "Fiscal 2025" means our fiscal year beginning on April 1, 2024 and ending March 31, 2025; (ii) the term "Fiscal 2024" means our fiscal year beginning on April 1, 2023 and ended March 31, 2024; (iii) the term "Fiscal 2023" means our fiscal year beginning on April 1, 2022 and ended March 31, 2023; (iv) the term "Transition Period" means the period beginning on January 1, 2022 and ended March 31, 2022; and (v) the term "Fiscal 2021" means our fiscal year beginning on January 1, 2021 and ended December 31, 2021. Our Consolidated Financial Statements are presented in U.S. dollars. As used in this report, the terms "we," "our," "us," "Under Armour" and the "Company" refer to Under Armour, Inc. and its subsidiaries unless the context indicates otherwise.

ITEM 1. BUSINESS

General

Our principal business activities are developing, marketing and distributing branded performance apparel, footwear and accessories for men, women and youth. Our performance products are engineered in many designs and styles for use in nearly every climate and are worn worldwide by athletes at all levels, from youth to professional, on various playing fields around the globe and by consumers with active lifestyles.

We generate net revenues from the sale of our products globally to national, regional, independent and specialty wholesalers and distributors. We also generate net revenue from the sale of our products through our direct-to-consumer sales channel, which includes our owned Brand and Factory House stores and e-commerce websites. We plan to continue to grow our business over the long term through increased sales of our apparel, footwear and accessories; growth in our direct-to-consumer sales channel; and expansion of our wholesale distribution. We believe that achievement of our long-term growth objectives depends, in part, on our ability to execute strategic initiatives in key areas including our wholesale, footwear, women's and direct-to-consumer businesses. Additionally, our digital strategy is focused on supporting these long-term objectives, emphasizing connection and engagement with our consumers.

We were incorporated as a Maryland corporation in 1996. We have registered trademarks around the globe, including UNDER ARMOUR®, HEATGEAR®, COLDGEAR®, HOVR® and the Under Armour UA Logo ®, and we have applied to register many other trademarks. This Annual Report on Form 10-K also contains additional trademarks and tradenames of our Company and our subsidiaries. All trademarks and trade names appearing in this Annual Report on Form 10-K are the property of their respective holders.

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