Shares of Under Armour (UA) - Get Report were little changed Friday after the athletic apparel company, already struggling before the coronavirus pandemic, announced it will temporarily lay off workers throughout the company and extend store closures.
As part of a restructuring plan that already was in the works before the pandemic raged, “the company expects to incur total estimated pretax restructuring and related charges in the range of $475 million to $525 million during 2020,” Under Armour said in a statement.
In February, the company said the cost would likely max out at $425 million.
"In these unprecedented and challenging times, the majority of stores where Under Armour is available remain closed, contributing to a significant decline in revenue," Under Armour CEO Patrik Frisk said in a statement.
"While we're thankful for the meaningful balance sheet improvements we've driven over the past two years and we are seeing some early signs of recovery in our Asia Pacific region, this unanticipated shock to our business has been acute, forcing us to make difficult decisions to ensure that Under Armour is positioned to participate in the eventual recovery of demand,” Frisk added.
Company stores are closed until further notice. The layoffs include 600 workers at Under Armour’s U.S.-based distribution centers, along with an unspecified number of employees in its U.S. full-price and outlet stores.
The company has withdrawn its first-quarter and full-year 2020 outlooks.
Under Armour has suffered weak sales for three years, and the government started investigating the company’s accounting practices last year.
The stock recently traded at $6.89, unchanged. It has plunged 64% over the last three months.