ua-20230630

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

Form 10-Q

______________________________________

(Mark One)


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

For the quarterly period ended June 30, 2023


☐			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 incorporation or organization)						(I.R.S. Employer Identification No.)
1020 Hull Street Baltimore, Maryland 21230						(410) 468-2512
(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)

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of July 31, 2023 there were 188,704,689 shares of Class A Common Stock, 34,450,000 shares of Class B Convertible Common Stock and 222,184,702 shares of Class C Common Stock outstanding.

Table of Contents

UNDER ARMOUR, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements:	1
	Condensed Consolidated Balance Sheets as of June 30, 2023 and March 31, 2023 (unaudited)	1
	Condensed Consolidated Statements of Operations for the Three Months Ended June 30, 2023 and 2022 (unaudited)	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended June 30, 2023 and 2022 (unaudited)	3
	Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended June 30, 2023 and 2022 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended June 30, 202 3 and 202 2 (unaudited)	5
	Notes to the Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 5.	Other Information	39
Item 6.	Exhibits	39
SIGNATURES		41

Ta ble of Conten ts

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Under Armour, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited; In thousands, except share data)


	June 30, 2023		March 31, 2023
Assets
Current assets
Cash and cash equivalents	$	703,591	$	711,910
Accounts receivable, net (Note 3)	695,455		759,860
Inventories	1,320,468		1,190,253
Prepaid expenses and other current assets, net	264,704		297,563
Total current assets	2,984,218		2,959,586
Property and equipment, net (Note 4)	679,114		672,736
Operating lease right-of-use assets (Note 5)	464,793		489,306
Goodwill (Note 6)	479,568		481,992
Intangible assets, net (Note 7)	8,616		8,940
Deferred income taxes (Note 17)	194,910		186,167
Other long-term assets	55,941		58,356
Total assets	$	4,867,160	$	4,857,083
Liabilities and Stockholders' Equity
Current liabilities
Current maturities of long-term debt (Note 9)	$	80,919	$	—
Accounts payable	714,189		649,116
Accrued expenses	333,638		354,643
Customer refund liabilities (Note 12)	136,017		160,533
Operating lease liabilities (Note 5)	139,878		140,990
Other current liabilities	59,565		51,609
Total current liabilities	1,464,206		1,356,891
Long-term debt, net of current maturities (Note 9)	594,107		674,478
Operating lease liabilities, non-current (Note 5)	677,121		705,713
Other long-term liabilities	126,316		121,598
Total liabilities	2,861,750		2,858,680
Stockholders' equity (Note 11)
Class A Common Stock, $0.0003 1/3 par value; 400,000,000 shares authorized as of June 30, 2023 and March 31, 2023; 188,704,689 shares issued and outstanding as of June 30, 2023 (March 31, 2023: 188,704,689)	63		63
Class B Convertible Common Stock, $0.0003 1/3 par value; 34,450,000 shares authorized, issued and outstanding as of June 30, 2023 and March 31, 2023	11		11
Class C Common Stock, $0.0003 1/3 par value; 400,000,000 shares authorized as of June 30, 2023 and March 31, 2023; 222,060,064 shares issued and outstanding as of June 30, 2023 (March 31, 2023: 221,346,517)	73		73
Additional paid-in capital	1,149,183		1,136,536
Retained earnings	936,007		929,562
Accumulated other comprehensive income (loss)	(79,927)		(67,842)
Total stockholders' equity	2,005,410		1,998,403
Total liabilities and stockholders' equity	$	4,867,160	$	4,857,083

Commitments and Contingencies (Note 10)

See accompanying notes.

Ta ble of Conten ts

Under Armour, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited; In thousands, except per share amounts)


	Three Months Ended June 30,
	2023		2022
Net revenues	$	1,317,012	$	1,349,057
Cost of goods sold	709,276		718,860
Gross profit	607,736		630,197
Selling, general and administrative expenses	586,806		595,714
Income (loss) from operations	20,930		34,483
Interest income (expense), net	(1,626)		(6,005)
Other income (expense), net	(6,385)		(14,241)
Income (loss) before income taxes	12,919		14,237
Income tax expense (benefit)	3,971		5,657
Income (loss) from equity method investments	(399)		(898)
Net income (loss)	$	8,549	$	7,682

Basic net income (loss) per share of Class A, B and C common stock (Note 18)	$	0.02	$	0.02
Diluted net income (loss) per share of Class A, B and C common stock (Note 18)	$	0.02	$	0.02

Weighted average common shares outstanding Class A, B and C common stock
Basic	444,872		458,415
Diluted	454,506		468,167

See accompanying notes.

Ta ble of Conten ts

Under Armour, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited; In thousands)


	Three Months Ended June 30,
	2023		2022
Net income (loss)	$	8,549	$	7,682
Other comprehensive income (loss):
Foreign currency translation adjustment	4,553		(23,525)
Unrealized gain (loss) on cash flow hedges, net of tax benefit (expense) of $7,185 and $(9,179), for the three months ended June 30, 2023 and 2022, respectively.	(8,256)		42,482
Gain (loss) on intra-entity foreign currency transactions	(8,382)		(13,534)
Total other comprehensive income (loss)	(12,085)		5,423
Comprehensive income (loss)	$	(3,536)	$	13,105

See accompanying notes.

Ta ble of Conten ts

Under Armour, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(Unaudited; In thousands)


	Class A Common Stock			Class B Convertible Common Stock			Class C Common Stock			Additional Paid-in-Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Equity
	Shares	Amount		Shares	Amount		Shares	Amount
Balance as of March 31, 2022	188,669	$	63	34,450	$	11	238,472	$	79	$	1,046,961	$	721,926	$	(40,086)	$	1,728,954
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	—	—		—	—		(35)	—		—		(352)		—		(352)
Class C Common Stock repurchased	—	—		—	—		(6,669)	(2)		49,659		(74,657)		—		(25,000)
Issuance of Class C Common Stock, net of forfeitures	—	—		—	—		258	—		993		—		—		993
Stock-based compensation expense	—	—		—	—		—	—		11,375		—		—		11,375
Comprehensive income (loss)	—	—		—	—		—	—		—		7,682		5,423		13,105
Balance as of June 30, 2022	188,669	$	63	34,450	$	11	232,026	$	77	$	1,108,988	$	654,599	$	(34,663)	$	1,729,075

Balance as of March 31, 2023	188,705	$	63	34,450	$	11	221,347	$	73	$	1,136,536	$	929,562	$	(67,842)	$	1,998,403
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	—	—		—	—		(301)

SEC Form 10-Q filed by Under Armour Inc.