(RTTNews) - Under Armour Inc. (UA, UAA) said it has extended current store closures until further notice, and withdrawn its first quarter and full-year 2020 outlook, due to ongoing disruption and uncertainty related to the global COVID-19 pandemic.
The company will temporarily lay off certain employees, reduce compensation of its executives. Additionally, its board has approved a previously planned restructuring initiative designed to rebalance its cost base to further improve future profitability and cash flow generation.
Beginning April 12th, the company will temporarily lay off the teammates that work in its U.S. Brand (full price) and Factory House (outlet) stores, and about 600 teammates that work at its U.S.-based distribution centers.
Additionally, the company will begin paying premium bonuses to its distribution center teammates continuing to work during the crisis. The company will have provided up to four weeks of full pay for these retail store and distribution center teammates since this crisis started.
Effective immediately, the company's Board will be reducing its compensation by 25% and all of the company's Executive Vice Presidents and above will be taking a 25% salary cut through the duration of the crisis.
The company will cover full health benefits for benefit-eligible teammates for approximately two months during this temporary layoff period.
On March 31, 2020, the company's board approved the previously announced restructuring plan.
In connection with this restructuring plan, the company said today it expects to incur total estimated pre-tax restructuring and related charges in the range of $475 million to $525 million during 2020.
Under Armour anticipates about $300 million of restructuring and related charges to be incurred as of March 31, 2020, including the impairment charges related to its New York flagship store.
The company currently anticipates that the remaining restructuring and related charges will occur by the end of 2020.
Based on anticipated timing of restructuring initiatives, the company expects to realize about $40 million to $60 million in pre-tax benefits in 2020.
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