Q1 2025 Under Armour Inc Earnings Call

Good morning and welcome to the Under Armour First Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.

Operator: conference call, all participants will be in listen-only mode.

Operator: Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad.

Operator: If you have a question, please press star then 2. Please note this event is being recorded. I would now like to turn the call over to Lance Allega, SDP, Investor Relations, Treasury, and Corporate Development. Please go ahead.

To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2.

Please note this event is being recorded.

Speaker Change: i'll nowlike to turn the call order land al ga as p investor relations treasury and corporate development please go ahead

Lance Allega: Good morning, and welcome to Under Armour's first quarter fiscal 2025 earnings conference call. This event is being recorded for replay. Joining us on today's call are Under Armour President and CEO Kevin Plank and CFO Dave Bergman. Our remarks today will include certain forward-looking statements that reflect Under Armour management's current view of our business as of August 8, 2024. These statements may include projections for our business in the present and future quarters and fiscal years. However, forward-looking statements are not guarantees of future business performance, and our actual results may differ materially from those expressed or implied in the views provided.

Speaker Change: Good morning and welcome to Under Armour's first quarter fiscal 2025 earnings conference call. Today's event is being recorded for replay.

Speaker Change: joining us on today's callor under mber president in c o kevin plank and co day bergman

Speaker Change: our marks today will include certain forward-looking statements that reflect on norm's management' current view of our businessesas of august eeightghthtwo thousand and twenty-four

these statements may inclu projections for our business in the present and future quarters and fiscal years forward-looking statements are not guarantees of future business performance and our actual results may differ materially from those express or implied in of these provided

Lance Allega: Statements made are subject to risks and other uncertainties detailed in this morning's press release and documents filed regularly with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. Today's discussion may also include non-GAAP references. Under Armour believes these measures give investors a helpful perspective on underlying business trends. When applicable, these measures are reconciled to the most comparable U.S. gap measures.

Speaker Change: Statements made are subject to risks and other uncertainties detailed in this morning's press release and documents filed regularly with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q.

Speaker Change: today's discussion may also include non-gaap references

Kevin: Under Armour believes these measures give investors a helpful perspective on underlying business trends. When applicable, these measures are reconciled to the most comparable U.S. GAAP measures . Reconciliations, along with other pertinent information, can be found this morning's press release and at about.underarmour.com. With that, I'll turn the call over to Kevin.

Lance Allega: Reconciliations, along with other pertinent information, can be found in this morning's fresh release and at about.underarmour.com. With that, I'll turn the call over to Kevin. Thank you, Lance, and good morning, everyone, for joining us on today's call. With the first quarter of Fiscal 25 behind us, I'm pleased that we started the year ahead of expectations, and I'm encouraged by the early progress we're making in executing our Protect the South strategy. At the center of this strategy, we've recently declared to our team and partners that Under Armour is a sports house, a term that we're using to define the landscape in which we compete. The Sports Industry version of the only handful of brands from Europe who've earned the right to refer to themselves as fashion houses.

Kevin: Thank you, Lance, and good morning, everyone, for joining us on today's call.

Kevin: with the first quarter of fiscal twenty five hind i'm pleased that we started the year ahead of expectations and i'm encouraged by the ear progress we're making in executing our protective south strategy

Kevin: At the center of this strategy, we've recently declared to our team and partners that Under Armour is a sports house, a term that we're using to define the landscape in which we compete.

Kevin: The sports industry's version of the only handful of brands from Europe who've earned the right to refer to themselves as fashion houses.

Kevin Plank: Across the sports brand landscape, we believe there are less than five brands that could be represented on this podium for sports globally, and that we are one of them. Earned over a 29-year history the credibility to show up in virtually any athletic endeavor on the field, pitch, or court, as an outfitter, and be seen by athletes in the more than 100 countries where we do business today, and we are generally famous as an authentic brand, an authentic sports house brand. This rare air amongst the landscape of the sports industry is an aspect of UA that we feel is incredibly unique. And just one of the attributes of strength we see for ourselves.

Kevin: Across the sports brand landscape, we believe there are less than five brands that could be represented on this podium for sports globally.

Kevin: and that we are one of them

Kevin: earned over a twenty nine year history the credibility to show p in virtually any athletic endeavor on the field pitch or court as an outfidter and be seen by athletes in the more than one hundred countries where we do business today and are generally famous as an authentic brand and authentic sports house spand

Speaker Change: This rare air amongst the landscape of the sports industry is an aspect of UA that we feel is incredibly unique. In just one of the attributes of strength we see for ourselves, we contemplate the opportunity that Under Armour has in front of us.

Kevin Plank: We contemplate the opportunity that Under Armour has in front of us. We believe this authenticity gives us an advantage as we reconstitute our brand strength and execute our strategy. To make that happen, this, of course, begins and ends with our culture, elevating its importance in visibility, raising the bar of our culture across the enterprise. And like our brand positioning work, we're also reconstituting this. Our culture is unique in how it describes our brand, the athletes we have, and the ones we plan to attract.

Kevin: We believe this authenticity gives us an advantage as we reconstitute our brand strength and execute our strategy.

Kevin: to make that happen this of course begins and ends with our culture

Kevin: elevating its importance in visibility raising the bar of our culture across the enterprise and like our brand positioning work we're also reconstituting this

Kevin: our culture is unique and how it describes our brand the athletes we have in the ones we plan to attrackact

Kevin Plank: In this spirit, we've redefined who and what we stand for within our strategic plan. As discussed on our last call, the who we are is about athletes, sports, innovation, and passion. And we have a passion for, in its simplest definition, the underdog, the athlete who is not given all of God's gifts of talent and, despite what they're missing, is not tall or fast enough or strong or swift or clever enough.

Kevin: in this spirit we' re to find who and what we stand for within our strategic plan has discussed in our last call the who we are being about athletes sports innovation and passion

Kevin: and we have a passion for in a simplest definition the underdog the athlete who is not given all god's gifts of counent and despite what they're missing

Kevin Plank: For all those who have to stay late after practice to work on a skill or study harder than the rest, this is our underdog. And because of this, UA's athletes must use every resource and waking hour to make themselves better. We don't innovate as a brand for athletes so that they can run up a score. We expect every product we build to provide an edge for our athletes, just to give them a fighting chance to compete.

Kevin: is not tall or fast enough or strong or swift or clever enough. For all those who have to stay late after practice to work on a skill or study harder than the rest, this is our underdog.

Kevin: and because of this ualways's athletes must use every resource in waking hour to make themselves better

Speaker Change: Said differently, we don't innovate as a brand for athletes so that they can run up a score. We expect every product we build to provide an edge for our athletes, just to give them a fighting chance to compete.

Kevin Plank: This mentality is what drives our innovation agenda and manifests through grit, an oversized chip on the shoulder that is UA's beacon, an underdog spirit that can never be counted out. Each day, this UA team will operate with a responsibility to do everything in our power to push the boundaries of innovation that makes athletes perform better. And above all else, we recognize the privilege and joy it is to work in sport. Our aspired culture will be the outcome of bringing this to life.

Kevin: This mentality is what drives our innovation agenda and manifests through grit, an oversized chip on the shoulder that is UA's beacon, an underdog spirit that can never be counted out.

Speaker Change: each day this u eightteen will operate with responsibility to do everything in our power to push the boundaries of innovation that makes athletes performmed better and above all else we recognize a privilege and joy it is to work in sports

Kevin Plank: In this effort, we must become more deliberate in everything we do, recognizing the difference between experimentation and intentionality, and have the right talent and agile decision-making abilities to ensure we can do this consistently at a high level. As such, we've invested meaningfully in experienced leaders to supercharge our ability to execute differently than in years past. We're not just building a company; we're building a brand. And the reason is that a brand is so much more valuable than just a company.

Kevin: Our aspired culture will be the output of bringing this to life.

Speaker Change: In this effort, we must become more deliberate in everything we do, recognizing the difference between experimentation and intentionality, and have the right talent and agile decision-making abilities to ensure we can do this consistently at a high level.

Speaker Change: As such, we have invested meaningfully and experienced leaders to supercharge our ability to execute differently than in years past.

Kevin: we're not just building a company we're building a brand and the reason is that a brand is so much more valuable than just a company

Kevin Plank: We're building a UA brand with purpose. One iteration, one success, one day at a time. Looking back at the last four months, assuming the CEO chair, we still have much work to do, but I'm proud of what's been accomplished to date, including implementing a nine-month go-to-market process to complement our 18-month calendar, with a self-form uncrushable hat being our first delivered product now available and in stock online. We also began to work to reduce our SKU style count by 25%.

Kevin: We're building the UA brand with purpose.

Speaker Change: one iteration one success one day at a time

Speaker Change: Looking back at the last four months and assuming the CEO chair, we still have much work to do.

Speaker Change: but i'm proud of what's been accomplished to date

Speaker Change: including implementing a nine-month go-to-market process to complement our 18-month calendar with the self-form uncrushable hat being our first delivered product now available and in stock online.

Operator: Conference called. All participants will be in this in only mode. Should you use assistance, please say no conference vessel, it's by question of star key followed by zero.

Kevin: We also began to work to reduce our SKU style count by 25%.

Kevin Plank: Implementing a category management structure and rightsizing our organization with a headcount reduction that, while painful, is now complete. However, we're still building, too. This brings me to the announcement we made a couple of days ago, the appointment of 30-year industry veteran Eric Liedtke as Under Armour's EVP of Brand Strategy. Following a 26-year career at Adidas, culminating in his roles as Brand President and Executive Board Member, we're thrilled to welcome you. Complementing one of the strongest product teams we've had in nearly a decade, Eric's proven track record of transformational brand growth and strategy will be an incredible asset to our product and regional leaders and our broader executive leadership team at this crucial time. As EVP of Brand Strategy, Eric will oversee our brand marketing, corporate strategy, consumer insights, sports marketing, creative, and loyalty functions.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask the question, you may cross-star them when you're a telephone keypad. To withdraw your question, please press star them too. Please note this is that is being recorded.

Speaker Change: implementing a category management structureand right sing our organization with a headcount reduction that while painful is now complete

Speaker Change: However, we're still building, too.

Eric Litkey: this brings me the ncement we made a ouple ofdays a the appointment of thirty-year industry veteran eric litkey as unnummersous ep of branch strategy

Lance Allega: I'll now like to turn the conference order land, Allega, SDP, investor relations, treasury and corporate development. Please go ahead.

Eric Litkey: following a twenty-six year career at udieddo culminating as world as as brand president executive board member we're thrilled to welcome

Lance Allega: Good morning and welcome to Under Armour's first quarter fiscal 2025 earnings conference call. Today's event is being recorded for replay. Joining us on today's call are Under Armour President and CEO Kevin Plank and CSO Dave Bergman. Our remarks today will include certain forward-looking statements that reflect Under Armour's management's current view of our business as of August 8th, 2024. These statements may include projections for our business in the present and future quarters and fiscal years. Forward-looking statements are not guarantees of future business performance. Our actual results may differ materially from those expressed or implied in the views provided.

Speaker Change: Complimenting one of the strongest product teams we've had in nearly a decade, Eric's proven track record of transformational brand growth and strategy will be an incredible asset to our product and regional leaders and our broader executive leadership team at this crucial time.

Eric Litkey: as epa brand strategy ericple oversee our brand marketing corporate strategy consumer insights sports marketing creative and loyalty functions

Kevin Plank: In addition, Eric will be tasked with building out our marketing organization, including its go-forward leadership team that will report to him. On our last call, we outlined what needed to be done immediately, and distilled the key points of our strategy into a presentation that's now been delivered to all 16,000 UA teammates and taken on the road to our key retail partners, factories, and franchisees globally across North America, EMEA, and AIPAC, from quick hallway talks to two to three hour meetings and presentations.

Eric Litkey: In addition, Eric will be tasked with building out our marketing organization, including its Go Forward leadership that will report to him.

Lance Allega: Statements made are subject to risks and other uncertainties detailed this morning's press release and documents filed regularly with the SEC, including our annual report on form 10k and our quarterly reports on form 10Q. Today's discussion may also include non-GAAP references. Under Armour believes these measures give investors a helpful perspective on underlying business trends. When applicable, these measures are reconciled to the most comparable US gap measures. Reconciliation along with other pertinent information can be found this morning's press release and at about.underarmour.com.

Speaker Change: on the last call we outlin what need to be done immediately

Speaker Change: distill the key points of our strategy into a presentation that's now been delivered to all 16,000 UA teammates and take it on the road to our key retail partners, factories, and franchisees globally across North America, EMEA, and APAC.

Eric Litkey: from quick hallway talks to two to three hour meetings and presentations we had transparent to a conversations to gain perspective about how to take better care of our brand

Kevin Plank: We had transparent, two-way conversations to gain perspective about how to take better care of our brand. These interactions have provided well-rounded insights into our strengths and areas of opportunity, such as being faster and bringing products to market, more intentional and committed storytelling for our launch, serving as a better business partner, and driving deeper connections with athletes to ignite brand love. A constant theme across these exchanges, parallel to the spirit of many of our investor conversations, is the optimism in Under Armour's ability to deliver a premium positioning and unleash our full potential. In the product construct of good, better, and best, we believe that UA can do business in all three, including as it relates to price, a unique characteristic of being an authentic sports podium brand.

Kevin Plank: With that, I'll turn the call over to Kevin.

Kevin Plank: Thank you, Lance, and good morning everyone for joining us on today's call. With the first quarter of fiscal 25 behind us, I'm pleased that we started the year ahead of expectations and I'm encouraged by the early progress we're making in executing our protective South strategy. At the center of this strategy, we've recently declared to our team and partners that under Armour is a sports house, a term that we're using to define the landscape in which we compete.

Eric Litkey: these interactions to provide a well rounded insights into our strength and areas of opportunity

Eric Litkey: such as being faster and bringing products to market, more intentional and committed storytelling for our launches, serving as a better business partner, and driving deeper connections with athletes to ignite brand love.

Eric Litkey: constant theme across these exchanges pparall to the spirit of many of our investor conversations is the optimism and underarm's ability to deliver a premium positioning in a leash our full potential

Kevin Plank: The sports industries version of the only handful of brands from Europe who've earned the right to refer to themselves as fashion houses. Across the sports brand landscape, we believe there are less than five brands that could be represented on this podium for sports globally, and that we are one of them. Earned over our 29-year history, the credibility to show up in virtually any athletic endeavor on the field, pitch or court as an outfitter and be seen by athletes in the more than 100 countries where we do business today and are generally famous as an authentic brand, an authentic sports house brand.

Speaker Change: in the product constructive good better inbest we believe that u a can do business in all three including as it relates to price a unique characteristic of being an authentic sports podi of brand

Kevin Plank: This is probably the most significant business advantage of being a sports house and why we believe we can drive a more premium positioning while not abandoning the good level altogether. This range is one of the reasons I know we can attract A-plus talent to join us in this next chapter. And this potential is evident. When we combine innovative products, outstanding design, and thoughtful storytelling, we delight athletes with performance solutions they never knew they needed and now cannot imagine living without.

Speaker Change: since s probably the most significant business advantage of being a sports house and why we believe we can drive more premium positioning while not abandoning good level altogether

Speaker Change: This range is one of the reasons I know we can attract A-plus talent to join us in this next chapter.

Kevin Plank: This rare era amongst the landscape of the sports industries and aspect of UA that we feel is incredibly unique and just one of the attributes of strength we see for ourselves, we contemplate the opportunity that under Armour has in front of us. We believe this authenticity gives us an advantage as we reconstitute our brand strength and execute our strategy. To make that happen, this, of course, begins and ends with our culture, elevating its importance and visibility, raising the bar of our culture across the enterprise, and like our brand positioning work, we're also reconstituting this.

Eric Litkey: And this potential is evident when we combine innovative products, outstanding design, and thoughtful storytelling, we delight athletes with performance solutions they never knew they needed and now cannot imagine living without.

Kevin Plank: This, in conjunction with our strengthened product team and feedback based on early sharing of our evolving product line architecture, is encouraging. We aim to scale this more broadly across every product we make with renewed energy, story, clarity, and alignment across the company. With that in mind, I'll highlight each element of our Protect This House strategy, starting with building better products and storytelling. Central to the evolution of our product organization has been the re-architecture of leadership and structure over the past year, with Gesine Seide leading a talented and experienced team of apparel, footwear, innovation, and design experts. By order of operations, product was the most immediate fix and, frankly, the longest lead time UA needed to address.

Eric Litkey: this in conjunction with our strengththened product team and feedback based on early sharing of our evolving product line architecture is encouraging

Eric Litkey: we aim to scale this more broadly across every product make with renewed energy story clarity and alignment across the company

Kevin Plank: Our culture is unique in how it describes our brand, the athletes we have, and the ones we plan to attract. In this spirit, we've redefined who and what we stand for within our strategic plan. As discussed in our last call, the who we are being about athletes, sports, innovation, and passion. We have a passion for, in its simplest definition, the underdog, the athlete who is not given all of God's gifts of talent, and despite what they are missing, is not tall or fast enough or strong or swift or clever enough.

Eric Litkey: With that, I'll highlight each element of our Protect This House strategy, starting with building better products and storytelling.

Eric Litkey: central to the evolution of our product organization has been the rearchitecture of leadership and structure over the past year

Gesheen Saidi: With Gesheen Saidi, leading a talented and experienced team of apparel, footwear, innovation, and design experts.

Speaker Change: By order of operations, product was the most immediate fix and, frankly, longest lead time UA needed to address. I'm very confident in the work this team is executing, including a more centralized vision across product, merchandise, and marketing that will enable us to correct our past inconsistencies.

Kevin Plank: I'm very confident in the work this team is executing, including a more centralized vision across product, merchandise, and marketing that will enable us to correct our past inconsistencies, always editing and innovating to drive our brand forward. With new leadership also came new priorities, and we're progressing well with our category portfolio realignment. This brings greater simplicity to the business and adds focus to our core sports categories, yielding much clearer roles and responsibilities for our product teams to identify and execute go-to-market plans that are ideally optimized for the highest quantitative and qualitative returns.

Kevin Plank: For all those who have to stay late after practice to work on a skill or study harder than the rest, this is our underdog. And because of this, UA's athletes must use every resource and waking hour to make themselves better. Said differently, we don't innovate as a brand for our athletes so that they can run up the score. We expect every product we build to provide an edge for our athletes, just to give them a fighting chance to compete.

Speaker Change: always editing and innovating to drive our brand forward.

Speaker Change: With new leadership also came new priorities.

Speaker Change: And we're progressing well with our category portfolio realignment. This brings greater simplicity to the business and adds focus to our core sports categories, yielding much clearer roles and responsibilities for our product teams to identify and execute go-to-market plans that are ideally optimized for the highest quantitative and qualitative returns.

Kevin Plank: This mentality is what drives our innovation agenda and manifests through grit, an oversized chip in the shoulder that is UA's beacon, an underdog spirit that can never be counted out. Each day, this UA team will operate with responsibility to do everything in our power to push the boundaries of innovation that makes athletes perform better. And above all else, we recognize the privilege and joy it is to work in sports. Our aspired culture will be the output of bringing this to life.

Kevin Plank: As mentioned on our last call, our Fall-Winter 25 season is when this team's efforts will begin to show up more robustly with new design language and improved balance between performance and style, a pivotal season that we will build into subsequent years. Yet, that doesn't mean we're just sitting back waiting for next year. We're working to elevate our core men's apparel business with a refined assortment and infusing it with industry-leading performance technologies and a more deliberate design direction.

Speaker Change: As mentioned on our last call, our Fall-Winter 25 season is when this team's efforts will begin to show up more robustly with new design language and improved balance between performance and style. A pivotal season that we will build into subsequent ones.

Speaker Change: Yet, that doesn't mean we're just sitting back, waiting for next year. We're working to elevate our core men's apparel business with a refined assortment, infusing it with industry-leading performance technologies in a more deliberate design direction.

Kevin Plank: In this effort, we must become more deliberate in everything we do, recognizing the difference between experimentation and intentionality and have the right talent and agile decision-making abilities to ensure we can do this consistently at a high level. As such, we've invested meaningfully in experienced leaders to supercharger ability to execute differently than in years past. We're not just building a company, we're building a brand and the reason is that a brand is so much more valuable than just a company.

Kevin Plank: At the same time, we're sequencing investments in our footwear and women's businesses to reinvigorate consideration among two of our largest long-term growth opportunities. We're also shifting towards a head-to-toe approach across our largest categories by employing key franchises, trend-right styles, and innovations to underscore an always-on authenticity. Looking at the season ahead, fall, winter 24, we're going to see an uptick in our sportswear offering with more occasions to wear them for the 16 to 24 year old varsity team sport athlete who we target.

Speaker Change: At the same time, we're sequencing investments in our footwear and women's businesses to reinvigorate consideration among two of our largest long-term growth opportunities.

Speaker Change: we're also shifting towards a headed to approach across our largest categories by coloing puloying key franchises trend right styles in innovations to underscore and always on authenticity

Kevin Plank: We're building a UA brand with purpose, one iteration, one success, one day at a time. Looking back in the last four months and assuming the CEO chair, we still have much work to do. But I'm proud of what's been accomplished to date, including implementing a nine-month go-to-market process to complement our 18-month calendar with a self-form and crushable hat being our first delivered product and now available and in stock online. We also began the work to reduce our skew style count by 25% implementing a category management structure and right-starting our organization with a head count reduction that, while painful, is now complete. However, we're still building too.

Speaker Change: Looking at the season ahead, Fall-Winter 24, we're going to see an uptick in our sportswear offering with more to and from wearing occasions for the 16 to 24 year old varsity team sport athlete who we target.

Kevin Plank: This includes the launch of high-performance streetwear in Unstoppable, versatility style and athletic performance in Meridian, elevated warm-ups and sport-inspired looks in our Icon Fleece collection, Infinite and Phantom running launches, and finally, in basketball, the Curry 12, along with the first signature shoe for De'Aaron Fox of the Sacramento Kings. Our next most significant effort is driving an improved demand creation ecosystem through compelling storytelling and aligned merchandise We've begun to optimize our marketing organization, including efforts to clean up our messaging, particularly in North America. A great example is our use of performance marks. Last year, when we sent an email to consumers, two-thirds of these messages were about discounts or promotions, and one-third were focused on full-price selling and storytelling.

Speaker Change: this includes the launch of high performance sheetwar and unstopppical vers style and athlet performance of meridian

Speaker Change: Elevated Warm-Ups and Sport-Inspired Looks in our Icon Fleece Collection.

Speaker Change: infinite and phantom running launches and finally in basketball the Curry 12 along with a first signature shoe for D'Aaron Fox of the Sacramento Kings

Speaker Change: Our next most significant effort is driving improved demand creation ecosystem through compelling storytelling and aligned merchandising.

Speaker Change: We've begun to optimize our marketing organization, including efforts to clean up our messaging, particularly in North America.

Kevin Plank: This brings me to the announcement we made a couple days ago. The appointment of 30-year industry veteran Eric Litke as unarmored EVP of brand strategy. Following a 26-year career at Adidas, culminating in his world as brand president and executive board member, we're thrilled to welcome him. Complimenting one of the strongest product teams we've had in nearly a decade, Eric's proven track record of transformational brand growth and strategy will be an incredible asset to our product and regional leaders and our broader executive leadership team at this crucial time.

Speaker Change: the great example is our use of performance marketing last year when we sentend an e-mail to consumers two thirds of these messages were about discounts or promotions and one third wewerere focused on full price selling and storytelling

Kevin Plank: This year, that ratio is now inverted, which, although early, is showing signs of positive traction and perception. So it's encouraging to imagine how a year's impact might improve our brand affinity, in addition to not simply leading on the retail floor or online with price. We will ensure that we are telling a story about the product advantages, with messaging focused on premium franchises and inspirational connections around key retail and sports moments. In North America, upcoming back-to-school activations highlight key franchises across team sports, apparel, footwear, and sportswear styles.

Speaker Change: This year, that ratio is now inverted, which, although early, is showing signs of positive traction and perception.

Speaker Change: So, it's encouraging to imagine how a year's impact might improve our brand affinity.

Kevin Plank: As EVP of brand strategy, Eric will oversee our brand marketing, corporate strategy, consumer insights, sports marketing, creative and loyalty functions. In addition, Eric will be tasked with building out our marketing organization, including its go-forward leadership that will report to him. On our last call, we outlined what needed to be done immediately. To fill the key points of our strategy into a presentation that's now been delivered to all 16,000 UA teammates and take it on the road to our key retail partners, factories, and franchisees globally across North America, America, From quick hallway talks to two to three hour meetings and presentations, we had transparent two-way conversations to gain perspective about how to take better care of our brand.

Speaker Change: in addition to not simply leading on the retail floor or online with price we will ensure that we are telling a story about the product advantages with messaging focused on premium franchises and inspirational connections around key retail and sports moments

Speaker Change: In North America, upcoming back-to-school activations highlight key franchises across team sports, apparel, footwear, and sportswear styles.

Kevin Plank: The Elite 24 Basketball Showcase this coming weekend in New York City. Our All-America Volleyball and American Football events in Orlando in January give us an excellent platform to connect even more deeply with young team sport athletes. In Asia-Pacific, Stephen Curry will be taking his first tour across China since 2019 this September.

Speaker Change: The Elite 24 Basketball Showcase this coming weekend in New York City and our All-America Volleyball and American Football events in Orlando in January give us an excellent platform to connect even more deeply with young team sport athletes.

Speaker Change: In Asia-Pacific, Stephen Curry will be taking his first tour across China since 2019 this September .

Kevin Plank: And we're generating brand heat through social media and activations, leading to millions of new followers and thousands of new member enrollments in just the first few days. With four major cities on tap, we look forward to September's tour and the energy it will bring to the Chinese market. In Europe, across EMEA, football has been a sharp point in driving brand affinity with youth and unlocking our sportswear consideration. Activations during critical sporting moments, including the English Premier League, the Champions League Final, and the Euro Championship, focused on our iconic Heat Gear compression apparel and the clone Magnetico boot featuring a young stable of UA athletes, including Tony Ruediger of Real Madrid and Eddie Enquetia of Arsenal. We are very much involved in this conversation in European football.

Kevin Plank: These interactions have provided well-rounded insights into our strengths and areas of opportunity, such as being faster and bring products to market, more intentional and committed storytelling for our launches, serving as a better business partner, and driving deeper connections with athletes to ignite brand love. Constant theme across these exchanges, parallel to the spirit of many of our investor conversations is the optimism and underarmers ability to deliver a premium positioning and a least sharp full potential.

Speaker Change: and we're generating brand heat through social media and activations leading to millions of new followers and thousands of new member enrollments in just the first few days

Speaker Change: With four major cities on tap, we look forward to September's tour and the energy it will bring to the Chinese market.

Speaker Change: In Europe , across EMEA, football has been a sharp point in driving brand affinity with youth and unlocking our sportswear consideration.

Speaker Change: Activations during critical sports moments including the English Premier League, Champions League Final, and the Euro Championships.

Kevin Plank: In the product construct of good, better and best, we believe that UA can do business in all three, including as it relates to price, a unique characteristic of being an authentic sports podium brand. This is probably the most significant business advantage of being a sports house, and while we believe we can drive a more premium positioning, while not abandoning good level altogether. This range is one of the reasons I know we can attract a plus talent to join us in this next chapter.

Speaker Change: focused on our iconic keycare compression ofapparel in the clon magnetico boot featuring a young stable of a athletes including tony rudiger of ilmadrid eddie and ka of arsenal we are very much in this conversation in european foball

Kevin Plank: We're also increasing our investment in paid social media influencers. Over the next few years, we intend to double the number of influencers in our creator program, to lean into fresh, new content, to drive reach and engagement. In line with this, we signed University of Miami Women's College basketball players Haley and Hannah Cavender to a multi-year partnership.

Speaker Change: We're also increasing our investment in paid social media influencers.

Speaker Change: over the nextfewyears we intended to double a numberofinfluencces in our creat program to an into fresh new content to drive reach and engagement

Kevin Plank: And this potential is evident, and we combine innovative products, outstanding design, and thoughtful storytelling. We delight athletes for performance solutions they never knew they needed, and now cannot imagine living without. This in conjunction with our strength and product team and feedback based on early sharing of our evolving product line architecture is encouraging. We aim to scale this more broadly across every product we make, with renewed energy, story, clarity, and alignment across the company.

Speaker Change: In line with this, we signed University of Miami Women's College basketball players Haley and Hannah Cavender to a multi-year partnership. This serves as a metaphor for tying together sport authenticity and influencer relevance. With nearly 7 million followers across Instagram and TikTok, it's great to welcome them to the brand.

Kevin Plank: This serves as a metaphor for tying together sport authenticity and influencer relevance. With nearly 7 million followers across Instagram and TikTok, it's great to welcome them to the brand. Another first quarter highlight was demonstrating staying on our front foot with collegiate assets, including extending our partnership with the University of Maryland to be the exclusive outfitter of athletics programs, including 19 varsity sports and university clubs in intramural sports. With now 7 Power 4 teams for UA, 85 Division 1 squads, and 350 Division 2 and Division 3 schools, our NCAA presence is a testament to Under Armour being a brand that athletes trust, a true sports

Speaker Change: Another first quarter highlight was demonstrating staying on our front foot with collegiate assets, including extending our partnership with the University of Maryland to be the exclusive outfitter of athletics programs, including 19 varsity sports and universities club in intramural sports.

Kevin Plank: With that, I'll let each element of our protective house strategy start starting with building better products and storytelling. Central to the evolution of our product organization has been the re-architecture of leadership and structure over the past year. With Gisein-Side, leading a talented and experienced team of apparel, footwear, innovation, and design experts, by order of operations, product was the most immediate fix and frankly longest lead time UA needed to address. I'm very confident the work this team is executing, including a more centralized vision across product merchandise and marketing that will enable us to correct our past inconsistencies, always editing and innovating to drive our brands forward.

Speaker Change: With now 7 Power 4 teams for UA, 85 Division 1 squads, and 350 Division 2 and Division 3 schools, our NCAA presence is a testament to Under Armour being a brand that athletes trust. A true sports house.

Kevin Plank: We also announced our new partnership with USA Football as the official and exclusive partner. This is also an excellent opportunity for us to have a front and center grassroots pathway to define flag football across more than a million member athletes by integrating it into our existing UA Next platform. We're very excited about this, especially as it leads to flag football's debut at the 2028 Summer Olympics in Los Angeles, where you will be the official outfitter for Team USA competing on the gridiron.

Speaker Change: We also announced our new partnership with USA Football as the official and exclusive uniform apparel and footwear provider, including the U.S. men's and women's national teams.

Speaker Change: This is also an excellent opportunity to have a front and center grassroots pathway to defining flag football across more than a million member athletes by integrating it into our existing UA Next platform.

Kevin Plank: With new leadership also came new priorities, and we're progressing well with our category portfolio re-alignment. This brings greater simplicity to the business and adds focus to our core sports categories, yielding much clearer roles and responsibilities for our product teams to identify and execute go-to-market plans that are ideally optimized for the highest quantitative and qualitative returns. As mentioned on our last call, our Fall Winter 25 season is when this team's efforts will begin to show up more robustly with new design language and improve balance between performance and style, a pivotal season that we will build into subsequent ones.

Speaker Change: We're very excited about this, especially as it leads to flag football's debut at the 2028 Summer Olympics in Los Angeles, where UA will be the official outfitter for Team USA competing on the gridiron.

Kevin Plank: And speaking of the Olympics, with more than 70 athletes from 26 countries across 28 sports representing UA, we've had a fantastic roster on the world's largest, most famous athletic stage. A few call-outs, of course, are Stephen Curry and Kelsey Plum on the U.S. men's and women's basketball teams, and New York City Marathon winner Sharon Locati, representing Kenya at her first Olympics.

Speaker Change: And speaking of the Olympics, with more than 70 athletes from 26 countries across 28 sports representing UA, we've had a fantastic roster on the world's largest, most famous athletic stage.

Speaker Change: A few call-outs, of course, are Stephen Curry and Kelsey Plum on the U.S. men's and women's basketball teams.

Speaker Change: new york city marathon wner sharon locaty representing kenya at our first games and firm in lopezas a key spamageish player whosehas led his team to the final lympic footall tournament by scoring four goals and two assists in just five games

Kevin Plank: And Thurman Lopez, a key Spanish player who's led his team to the final of the Olympic football tournament by scoring four goals and two assists in just five games. Next up is our second strategic priority, running smart plays and our work to optimize our business to clean up unnecessary complexity, meaning growth by constraint. Our approach here is simple: test all existing rules to determine how to take advantage of all business dimensions more efficiently.

Kevin Plank: Yet that doesn't mean we're just sitting back waiting for next year. We're working to elevate our core men's apparel business with a refined assortment, infusing it with industry leading performance technologies in a more delivered design direction. At the same time, we're sequencing investments in our footwear and women's businesses to reinvigorate consideration among two of our largest long-term growth opportunities. We're also shifting towards a head-to-toe approach across our largest categories by employing key franchises, trend-right styles, and innovations to underscore and always on authenticity.

Speaker Change: Next up is our second strategic priority, running smart plays and our work to optimize our business to clean up unnecessary complexity.

Speaker Change: Meaning growth by constraint.

Speaker Change: Our approach here is simple. Test all existing rules to determine how to take advantage of all business dimensions more efficiently. Accordingly, no area is left unturned, and all systems, structures, and processes must have a clear and well-defined purpose and output and definition of success.

Kevin Plank: Accordingly, no area is left unturned, and all systems, structures, and processes must have a clear and well-defined purpose and output and definition of success. Though a difficult decision, our restructuring program has given us a head start in streamlining the organization. During the quarter, we right-sized our workforce and are executing various transformational initiatives and advancing considerations around facilities, software, and other areas. As a result of some of this work, we've begun laying out projects to automate tasks in decision-making processes using both traditional and AI solutions to unlock data-driven insights and operational improvements.

Kevin Plank: Looking at the season ahead, Fall Winter 24, we're going to see an uptick in our sportswear offering, with more to and from wearing occasions for the 16 to 24-year-old varsity team-sport athlete who we target. This includes the launch of high-performance streetwear and unstoppable, versatile style and athletic performance and meridian, elevated warm-ups and sport-inspired looks in our icon-fleece collection, infinite and phantom-running launches, and finally, in basketball, the Curry 12, along with the first signature shoe for de-airn-fox of the Sacramento Kings.

Speaker Change: Though a difficult decision, our restructuring program has given us a head start in streamlining the organization.

Speaker Change: During the quarter, we right-sized our workforce and are executing various transformational initiatives and advancing considerations around facilities, software, and other areas.

Speaker Change: As a result of some of this work, we've begun laying out projects to automate tasks in decision-making processes using both traditional and AI solutions to unlock data-driven insights and operational improvements. So, very promising for long-term efficiency gains.

Kevin Plank: So, very promising for long-term efficiency. However, this output of complexity has led to the creation of, frankly, too many products that, without proper segmentation and marketplace differentiation, have challenged brand affinity. In this respect, I've tasked our team with achieving a 25% SKU reduction over the next 18 months, and we're making solid progress toward this objective. This is not, however, a blanket strategy across our good, better, and best contracts. Nor does it apply to all categories equally.

Kevin Plank: Our next most significant effort is driving improved demand-creation ecosystem through compelling storytelling and aligned merchandising. We've begun to optimize our marketing organization, including efforts to clean up our messaging, particularly in North America. A great example is our use of performance marketing. Last year, when we sent an email to consumers, two-thirds of these messages were about discounts or promotions, and one-third were focused on full-price selling and storytelling. This year, that ratio is now inverted, which, although early, is showing signs of positive traction and perception, so it's encouraging to imagine how a year's impact might improve our brand affinity.

Speaker Change: an output of complexity led to the creation of frankly too many products that without proper segmentation and marketplace differentiation have challenged brand affinity in this respect i've cast our team with achieving a twenty five percent kew reduction over the next eighteen months

Speaker Change: and we're making solid progress toward this objective

Speaker Change: This is not, however, a blanket strategy across our good-better-best construct.

Kevin Plank: We're being surgical in this effort, distorting toward areas of opportunity with the highest returns, both financially and strategically from a brand-building perspective and purposely over-indexing toward better and best-level products as we elevate our brand position. We're also working to become smarter and more efficient by modernizing our supply chain with two primary objectives. Improving our end-to-end planning and cross-channel capabilities, led by Chief Supply Chain Officer Sean Curran, our end-to-end planning work spans multiple disciplines, aiming to enhance our ability to plan better and protect our consumers' needs, to optimize our assortments and manage inventory across regions, channels, and retail doors.

Speaker Change: Nor does it apply to all categories equally. We're being surgical in this effort, distorting toward areas of opportunity with the highest returns, both financially and strategically, from a brand-building perspective, and purposely over-indexing towards better and best-level products as we elevate our brand positioning.

Kevin Plank: In addition to not simply leading on the retail floor or online with price, we will ensure that we are telling a story about the product advantages, with messaging focused on premium franchises and inspirational connections around key retail and sports moments. In North America, upcoming back-to-school activations highlight key franchises across team sports, apparel, footwear and sports wear styles. The Elite 24 basketball showcase this coming weekend in New York City. In our All-America, volleyball, and American football events in Orlando in January, give us an excellent platform to connect even more deeply with young team sport athletes.

Speaker Change: we're also working to become smarter more efficient by modernizing our supply chain with two primary objectives

Sean Curran: Improving our end-to-end planning and cross-channel capabilities, led by Chief Supply Chain Officer Sean Curran, our end-to-end planning work spans multiple disciplines.

Sean Curran: aiming to enhance our ability to plan better protect our her consumers's needs to optimize our assortments and manage inventory across regions channels and retail doors

Kevin Plank: We've also started a multi-year distribution logistics modernization initiative to enable cross-channel capabilities to optimize cost, maximize speed, ensure inventory availability, and increase service levels across our DTC and wholesale business. Now, that takes us to our third priority.

Sean Curran: We've also started a multi-year distribution logistics modernization initiative to enable cross-channel capabilities to optimize cost, maximize speed, ensure inventory availability, and increase service levels across our DTC and wholesale businesses.

Kevin Plank: In Asia Pacific, Stepping Curry will be taking his first tour across China since 2019 this September, and we're generating brand heat through social media and activations, leading to millions of new followers and thousands of new member enrollments in just the first few days. With four major cities on tap, we look forward to September's tour, and the energy you will bring to the Chinese market. In Europe across America, football has been a sharp point in driving brand affinity, with youth and unlocking our sportswear consideration.

Kevin Plank: Elevating Consumer Experiences, where we're focused on driving excellence across our direct consumer and wholesale business. In DTC, the first quarter marked the beginning of our journey to elevate our North American e-commerce business toward a more significant and premium consideration. As expected, our e-commerce revenue is down, driven by roughly a third fewer promotional days than last year. However, positively. The percentage of full price sales in our digital channel rose significantly, along with a reduced mix of outlet and clearance sales.

Sean Curran: that takes us to our third priority elevating consumer experiences where we're focused on driving excellence across our directs consumer and wholesale businesses

Sean Curran: in dtc the first quarter markedthe beginning of our journey to elevateour north american e-commerce business to a more significant and premium consideration

Sean Curran: As expected, our e-commerce revenue was down, driven by roughly a third fewer promotional days than last year. However, positively...

Sean Curran: The percentage of full-price sales in our digital channel rose significantly, along with a reduced mix of outlet and clearance sales. So although still in the early days of this strategy, we're optimistic about initial performance metrics, which include higher average order values.

Kevin Plank: So, although still in the early days of this strategy, we're optimistic about initial performance metrics, which include higher average order values. Regarding physical retail, we're focused on delivering service excellence and identifying areas to improve upselling, repeat business, and profitability. To support this, we're testing a new full-priced brand house concept and are pleased with the initial results. Seeing an improvement in productivity and revenue per visit, with Cleaner Sightlines, a more curated product assortment, including nearly 50% fewer skews, and an evolved in-store presentation, athletes can more easily see and feel the power of the Under Armour brand.

Kevin Plank: Activations during critical sports moments, including the English Premier League, Champions League Final, and the Euro Championships, focused on our iconic key-care compression apparel, and the clone magnetico boot featuring a young stable of UA athletes, including Tony Rudiger of Real Madrid, Eddie and Ketia of Arsenal. We are very much in this conversation in European football. We're also increasing our investment in paid social media influencers. Over the next few years, we intended double the number of influencers in our Creator program, to lean into fresh new content to drive reach and engagement.

Sean Curran: Regarding physical retail, we're focused on delivering service excellence and identifying areas to improve, upselling, repeat business, and profitability.

Sean Curran: to support this we're testing a new full priceed brandhouse concept and are pleased with the initial results seeing an improvement in productivity and revenue provisitor

Sean Curran: with cleaner sightlines a more curated product assortment including nearly fifty percent fewer skws and an evolved in-store presentation athletes can more easily see and feel the power of the underara brand

Kevin Plank: In line with this, we signed University Miami Women's College basketball players, Haley and Hannah Cavendr, to a multi-year partnership. This serves as a metaphor for trying to get a sport authenticity in influencer relevance, with nearly 7 million followers across Instagram and TikTok. It's great to welcome them to the brand. Another first quarter highlight was demonstrating staying on our front foot with collegiate assets, including extending our partnership with the University of Maryland to be the exclusive outfit of Athletics program, including 19 varsity sports and University's club and intramural sports.

Kevin Plank: All of this will come together even more beautifully later this year as we open our new flagship store at our new headquarters here in Baltimore before the end of December. At our factory house outlets, we're digging in to optimize this business better, especially in North America, which is critical to balancing future revenue and margin opportunities. During the quarter, we initiated trials with mixed results as we dialed various promotional levels up and down to assess volume and ASP impacts.

Sean Curran: All of this will come together even more beautifully later this year as we open our new flagship store at our new headquarters here in Baltimore before the end of December.

Sean Curran: In our factory house outlets, we're digging in to optimize this business better, especially in North America, which is critical to balancing future revenue and margin opportunities.

Speaker Change: during the quarter we initiated trials with mixed results we'vedwed various promotallevels up and down to assess volume and asp impacts in excellent test and learn as we solidify our go-forward strategies

Kevin Plank: With now seven power four teams for UA, 85 Division 1 squads, and 350 Division 2 and Division 3 schools. Our NCAA presence is a testament to Under Armour being a brand that athletes trust. A true sports house. We also announced our new partnership with USA football, the official and exclusive uniform apparel and footwear provider, including the US men's and women's national teams. This is also an excellent opportunity to have a front and center grassroots pathway to the finding flag football across more than a million member athletes by integrating it into our existing UA next platform.

Kevin Plank: An excellent test and learn as we solidify our go-forward strategy. We're also working to change our assortment and segmentation, including less made-for-outlet products, SKU reductions, elevated visual presentations, and full-price selling, all geared to harnessing this platform more effectively to generate capital for other parts of our business. Our loyalty program is also giving us an added boost in realizing improved long-term growth, profitability, and higher brand engagement. With less than a year under its belts in North America, UA Rewards has grown quickly, and its performance has been a positive contributor.

Sean Curran: we're also working to change our assortment and segmentation including less made for outlet products skkew reductions elevated visual presentations and full price selling

Sean Curran: all geared at harnessing this platform more effectively to generate capital for other parts of our business

Sean Curran: Our loyalty program is also giving us an added boost in realizing improved long-term growth, profitability, and higher brand engagement.

Sean Curran: With less than a year under our belts in North America, UA Rewards has grown quickly, and its performance has been a positive contributor.

Kevin Plank: We're very excited about this, especially as it leads to flag football's debut. At the 2028 Summer Olympics, in Los Angeles, where UA will be the official outfiter for Team USA competing on the gridiron. And speaking of the Olympics, with more than 70 athletes from 26 countries across 28 sports representing UA, we've had a fantastic roster on the world's largest, most famous athletic stage. A few call outs, of course, are Stephen Curry and Kelsey Plum on the US men's and women's basketball teams.

Kevin Plank: The program has nearly 5 million members and is growing month by month. It's exciting, too, that about half of recent enrollments are new to the brand. This is an excellent sign of expanding our reach with unique visitors. Further, nearly 60% of our North American DTC revenue comes from UA Reward members, and we're showing roughly 50% higher revenue per consumer, along with a three-fold increase in the 90-day repurchase rate compared to non-

Sean Curran: the program has nearly five million members in is growing month by month

Speaker Change: exciting to that about half of recent enrollments are new to the brand this is an excellent side of expanding our reach with unique visitors

Sean Curran: Further, nearly 60% of our North American DTC revenue comes from UA Reward members.

Sean Curran: And we're showing roughly 50% higher revenue per consumer, along with a three-fold increase in the 90-day repurchase rate compared to non-members, so very encouraging for the long term.

Kevin Plank: New York City marathon winner Sharon Locati representing Kenya at our first games. And Furman Lopez, a key Spanish player, who's led his team to the final of the Olympic football tournament by scoring four goals and two assists in just five games.

Kevin Plank: So very encouraging for the long term. Now Shifting to Wholesale. Following meetings with key global retail partners, I'm happy to report that they are encouraged by our progress and optimistic about the potential of our strategy. As mentioned, it will take time for the Wholesale Channel to mature. We must allow for improved storytelling to take shape.

Sean Curran: Now Shipping to Wholesale

Sean Curran: Following meetings with key global retail partners I'm happy to report that they are encouraged by our progress and optimistic about the potential of our strategy.

Sean Curran: As mentioned, it will take time for the Wholesale Channel to inflect. We must allow for improved storytelling to take shape.

Kevin Plank: Next up is our second strategic priority, running smart plays and our work to optimize our business to clean up unnecessary complexity, meaning growth by constraint. Our approach here is simple, test all existing rules to determine how to take advantage of all business dimensions more efficiently. Accordingly, no areas left unturned in all systems, structures and processes must have a clear and well-defined purpose and output and definition of success. Though a difficult decision, our restructuring program has given us a head start in streamlining the organization.

Kevin Plank: In the interim, we're changing the script on what it means to be a UA partner and are committed to strengthening our crucial..., count relationships in each distribution tier. In addition to working out improved segmentation with our current mix of products, we're partnering on better integrated planning and joint marketing opportunities. Though early in our journey to reconstitute Under Armour's brand strength, we're making tangible progress in building a more premium product offering.

Sean Curran: In the interim, we're changing the script on what it means to be a UA partner and are committed to strengthening our crucial...

Sean Curran: account relationships in each distribution tier. In addition to working out improved segmentation with our current mix of products, we're partnering on better integrated planning and joint marketing opportunities.

Sean Curran: In closing.

Sean Curran: Though early in our journey to reconstitute Under Armour's brand strength, we're making tangible progress in building a more premium product offering, we're running smarter plays by tightening up our SG&A, reducing SKUs and materials, and beginning to elevate consumer shopping experiences.

Kevin Plank: We're running smarter plays by tightening up our SG&A, reducing SKUs and materials, and beginning to elevate the consumer shopping experience. Amid the early progress we're making, and Eric coming on board to fill a critical missing piece of our puzzle through marketing... We'll continue to empower and evolve our culture to reduce complexity and be more deliberate in everything we do. I have every confidence that our improving level of execution will result in a better presentation of the Under Armour brand through building this sports house. There's much to do, but we're undeniably back on offer. With that, I'll hand it over to Dave for more details on the results and outlook. Dave?

Kevin Plank: During the quarter, we right sized our workforce and are executing various transformational initiatives and advancing considerations around facilities, software and other areas. As a result of some of this work, we've begun laying out projects to automate tasks and decision making processes using both traditional and AI solutions to unlock data driven insights and operational improvements. So very promising for long term efficiency gains. An output of complexity led to the creation of frankly too many products that without proper segmentation and marketplace differentiation have challenged brand affinity.

Speaker Change: amid the early progress we're making an air coming on board to fill a critical missing piece of our puzle through the marketing lens

Sean Curran: we'll continue to empower and evolve our culture to reduce complexity and be more deliberate and everything we do

Sean Curran: I have every confidence that our improving level of execution will result in a better presentation of the Under Armour brand.

Sean Curran: through building this sports house.

Sean Curran: There's much to do, but we're undeniably back on offense.

David Bergman: Thanks, Kevin. I'm starting right in with the results of our first quarter of fiscal 2025, which came in better than our expectations. Revenue was down 10% to $1.2 billion, with a 14% decline in North America due to softer full-price wholesale demand and lower sales to the off-price channel. Our DTC business was also down during the quarter, driven mainly by a decline in our e-commerce business resulting from proactive strategies to reduce promotional activity and a decline in our retail store sales. Revenue in Ameo was flat on a reported and currency-neutral basis, with strength in our DTC business partially offset by a slight decline in wholesale.

Kevin Plank: In this respect, I've tasked our team with achieving a 25% skewer reduction over the next 18 months and we're making solid progress toward the subjective. This is not, however, a blanket strategy across our good that our best construct. In order to apply to all categories equally, we're being surgical in this effort, distorting toward areas of opportunity with the highest returns, both financially and strategically from a brand building perspective and purposely over indexing towards better and best level products as we elevate our brand positions.

Sean Curran: With that, I'll hand it over to Dave for more details on the results and outlook. Dave? Thanks, Kevin. Starting right in with the results of our first quarter of fiscal 2025, which came in better than our outlook.

Dave: revenue was down ten percent of one point two billion with a fourteen percent decline in north america to the softer full price wholesale demand and lower sales to the off-price channel

Dave: Our DTC business was also down during the quarter, driven mainly by a decline in our e-commerce business resulting from proactive strategies to reduce promotional activity and a decline in our retail store sales.

Kevin Plank: We're also working to become smarter, more efficient by modernizing our supply chain with two primary objectives. Improving our end-to-end planning and cross-channel capabilities led by Chief Supply Chain Officer Sean Kern, our end-to-end planning work spans multiple disciplines, aiming to enhance our ability to plan better and protect our consumer's needs to optimize our assortments and manage inventory across regions, channels and retail doors. We've also started a multi-year distribution logistics modernization initiative to enable cross-channel capabilities to optimize cost, maximize speed, ensure inventory availability and increase service levels across our DTC and wholesale businesses.

Dave: Revenue in EMEA was flat on a reported and currency-neutral basis, which strengthened our DTC business, partially offset by a slight decline in wholesale.

David Bergman: APAC revenue was down 10% or down 7% on a currency-neutral basis, driven by declines in our wholesale and DTC businesses amid a softening macro that impacted consumer traffic and a highly competitive and promotional environment in the region. In Latin America, revenue was up 16%, or up 12% on a currency-neutral basis, with solid growth among regional distributors. From a channel perspective... First quarter wholesale revenue was down 8%, driven by softer demand in our full price and distributor businesses, along with lower sales to the off-price channel.

Sean Curran: APAC revenue was down 10% or down 7% on a currency neutral basis, driven by declines in our wholesale and DTC businesses amid a softening macro that impacted consumer traffic and a highly competitive and promotional environment in the region.

Dave: In Latin America, revenue was up 16%, or up 12% on a currency-neutral basis, with solid growth among regional distributors.

Kevin Plank: That takes us to our third priority, elevating consumer experiences where we're focused on driving excellence across our direct consumer and wholesale businesses. In DTC, the first quarter marked the beginning of our journey to elevate our North American e-commerce business toward a more significant and premium consideration. As expected, our e-commerce revenue was down, driven by roughly a third fewer promotional days than last year. However, positively, the percentage of full-price sales in our digital channel rose significantly, along with the reduced mix of outlet and clearance sales.

Dave: From a channel perspective, first quarter wholesale revenue was down 8%, driven by softer demand in our full-price and distributor businesses, along with lower sales to the off-price channel.

David Bergman: Direct to consumer revenue declined 12% with a 25% decline in e-commerce as we work to evolve this channel to a more premium positioning via lower promotions and discounts, and sales from our own and operator retail stores were down 3%. Licensing was down 14% due to declines in our North American and Japanese businesses.

Dave: Direct-to-consumer revenue declined 12% with a 25% decline in e-commerce as we work to evolve this channel to a more premium positioning via lower promotions and discounts.

Dave: and sales from our own and operator retail stores were down 3%.

Dave: Licensing was down 14% due to declines in our North American and Japanese businesses.

Kevin Plank: So, although still the early days of this strategy were optimistic about initial performance metrics, which include higher average order values. Regarding physical retail, we're focused on delivering service excellence and identifying areas to improve, upselling, repeat business and profitability. To support this, we're testing a new full-price brand house concept and are pleased with the initial results, seeing an improvement in productivity and revenue per visitor. With cleaner sight lines and more curated product absorbent, including nearly 50% fewer skews, and an evolved in-store presentation, athletes can more easily see and feel the power of the under-over brand.

David Bergman: By product type, apparel revenue was down 8%, with declines across most categories partially offset by relative strength in golf. Footwear revenue was down 15%, with declines across most categories, partially offset by relative strength in outdoor and golf. And our accessories business was down 5%. Our first quarter gross margin was up 110 basis points to 47.5%. This increase was driven by 170 basis points of pricing benefits due to lower levels of discounting and promotions, mainly in our direct-to-consumer business, because of our actions to drive a more premium positioning of our brand, and 40 basis points of supply chain benefits related to lower product costs and lower inventory reserves, partially driven by our first quarter overdrive.

Dave: By product type.

Dave: Apparel revenue was down 8% with declines across most categories, partially offset by relative strength in golf.

Dave: Footwear was down 15%, with declines across most categories, partially offset by relative strength in outdoor and golf.

Dave: and our accessories business was down five percent

Dave: Our first quarter gross margin was up 110 basis points to 47.5%.

Dave: This increase was driven by 170 basis points of pricing benefits due to lower levels of discounting and promotions, mainly in our direct-to-consumer business, because of our actions to drive a more premium positioning of our brand.

Kevin Plank: All of this will come together even more beautifully later this year as we open our new flagship store at our new headquarters here in Baltimore before the end of December. In our factory house outlets, we're digging in to optimize this business better, especially in North America, which is critical to balancing future revenue and margin opportunities. During the quarter, we initiated trials with mixed results as we dialed various promotional levels up and down to assess volume and ASP impacts, an excellent test and learn as we solidify our go-forward strategies.

Dave: and forty basis points of supply chain benefits related to lower product costs and lower inventory reserves partially driven by our first quarter overdrive

David Bergman: These benefits were partially offset by 60 basis points of headwinds from unfavorable regional and channel mix shifts and 50 Basis Points of Unfavorable Foreign Currency Impact. Our first quarter gross margin outperformance relative to the outlook we gave in May was due to three main factors. First, we were even less promotional than planned in our DTC business, as we started to test strategies for also reducing promotional activity in our factory house outlet stores, including less depth and discounts, which were not contemplated in our prior outlets. Second, inventory reserve needs were lower than planned, given a lower inventory balance and a healthier overall composition.

Dave: These benefits were partially offset by 60 basis points of headwinds from unfavorable regional and channel mix shifts and 50 basis points of unfavorable foreign currency impacts.

David Bergman: Third, we had some additional trailing benefits from year-over-year freight cost improvements compared to what was anticipated in our prior album. Moving down to P&L, our SG&A expenses increased 42% to $837 million in the first quarter. However, excluding a litigation reserve, net of an insurance receivable, and transformation expense, adjusted SG&A expenses were down 6% to $555 million.

Dave: our first quarter gross margin outperformance relative to the outlook we gave in may was due to three main factors

Kevin Plank: We're also working to change our sortment and segmentation, including less made for outlet products, skewer reductions, elevated visual presentations and full-price selling. All geared at harnessing this platform more effectively to generate capital for other parts of our business.

Dave: first we were even less promotional than planned in our dtc business as we started the test strategies for also reducing promotional activity in our factory house outlet stoourres including less depth in discounts which was not contemplated in our prior outlook

Kevin Plank: Our loyalty program is also giving us an added boost in realizing improved long-term growth, profitability and higher brand engagement. With less than a year under our belts in North America, U.A. Rewards has grown quickly and its performance has been a positive contributor. The program has nearly five million members and is growing month by month. Exciting too that about half of recent enrollments are new to the brand. This is an excellent sign of expanding our reach with unique visitors.

Dave: second inventory reserve needs were lower than planned given a lower inventory balance and healthier overall composition

Dave: Third, we had some additional trailing benefits from year-over-year freight cost improvements compared to what was anticipated in our prior outlook.

Dave: moving down the pl our sna expenses increased forty-two percent to eight hundred and thirty seven million in the first quarter

Kevin Plank: Further, nearly 60% of our North American DTC revenue comes from U.A. Reward members. And we're showing roughly 50% higher revenue per consumer, along with a three-fold increase in the 90-day repurchase rate compared to non-members, so very encouraging for the long term.

Dave: Excluding a litigation reserve, net of an insurance receivable, and transformation expenses, adjusted SG&A expenses were down 6% to $555 million.

David Bergman: This was mainly due to ongoing cost management actions, including headcount reductions and lower marketing expenses for the quarter. Additionally, during the quarter, we recognized $25 million of restructuring charges and incurred $9 million of transformational expenses booked in SG&A. We have now realized $34 million of the estimated $70 to $90 million in anticipated charges and expenses under our existing plan. Bringing this together, we had an operating loss of $300 million, or, excluding the litigation reserve, transformation expenses, and restructuring charges, our adjusted operating income was $8 million.

Dave: This was mainly due to ongoing cost management actions, including headcount reductions and lower marketing expenses for the quarter.

Kevin Plank: Now, shifting to wholesale. Following meetings with key global retail partners, I'm happy to report that they are encouraged by our progress and optimistic about the potential of our strategy. As mentioned, it will take time for the wholesale channel to inflect. We must allow for improved storytelling to take shape. In the interim, we're changing the script on what it means to be a UA partner and are committed to strengthening our crucial account relationships in each distribution tier. In addition to working out improved segmentation with our current mix of products, we're partnering on better integrated planning and joint marketing opportunities.

Dave: During the quarter, we recognized $25 million of restructuring charges and incurred $9 million of transformational expenses booked in SG&A.

Dave: we have now realized thirty-four million of the estimated seventy to ninety million and anticipated charges and expenses under our existing plan

Dave: bring this together we had an operating loss of three hundred million or excluding the litigation reserve transformation expenses and restructuring charges our adjusted operating income was eight million

David Bergman: On the bottom line, we realized a diluted loss per share of 70 cents, or an adjusted diluted earnings per share of one. These results were ahead of our outlook due to our revenue and gross margin overdrive and better SG&A expense control. From a balance sheet perspective, inventory was down 15% compared to last year, which was ahead of our expectations due to our revenue outperformance and effective inventory management. We continue to expect that our year-end inventory will be in line with Fiscal 24.

Kevin Plank: In closing, though early in our journey to reconstitute under Armour's brand strength, we're making tangible progress and building a more premium product offering. We're running smarter plays by tightening up our S-GNA, reducing skews and materials and beginning to elevate consumer shopping experiences. Amid the early progress we're making and air coming on board to fill a critical missing piece of our puzzle through the marketing lens will continue to empower and evolve our culture to reduce complexity and be more deliberate in everything we do. I have every confidence that our improving level of execution will result in a better presentation of the under Armour brand through building this sports house. There's much to do, but we're undeniably back on offense.

Dave: On the bottom line, we realized a diluted loss per share of $0.70.

Dave: or an adjusted diluted earnings per share of one cent.

Dave: these results were ahead of our outlook due to our revenue and gross margin overdrive and better sgna expense control

Dave: From a balance sheet perspective, inventory was down 15% compared to last year, which was ahead of our expectations due to our revenue outperformance and effective inventory management.

Dave: We continue to expect that our year-end inventory will be in line with Fiscal 24.

David Bergman: At the end of the quarter, after paying down the remaining $81 million outstanding balance of our convertible senior notes and purchasing $40 million of Class C common stock, which retired 5.9 million shares, we had no borrowings under our $1.1 billion revolving credit facility and a strong cash position of $885 million.

Dave: At the end of the quarter, after paying down the remaining $81 million outstanding balance of our convertible senior notes,

Dave: and purchasing forty million of class c common stock which were retired five point nine million shares we had no borrowings under our one point one billion revolving credit facility and a strong cash position of eight hundred and eighty five million

David Bergman: With that, I'll hand it over to Dave for more details on the results and outlook.

David Bergman: Thanks, Gavin. Starting right in with the results, our first quarter of physical 2025, which came in better than our outlook. Revenue was down 10% to 1.2 billion, with a 14% decline in North America to the softer full price wholesale demand and lower sales to the off price channel. Our DTC business was also down during the quarter driven by mainly by a decline in our e-commerce business resulting from proactive strategies to reduce promotional activity and a decline in our retail store sales.

David Bergman: Moving next to our Fiscal 25 Outlook. Our expectation that full-year revenue will decline at a low double-digit percentage rate has not changed. In summary, we exceeded our expectations in North America during the first quarter, and thus, we are modestly improving our full-year expectation for the region to now be down 14 to 16 percent. However, the North American improvement in our full-year forecast is expected to be offset by increasing market pressures in APAC for the balance of the year.

Dave: Shifting next to our Fiscal 25 Outlook.

Dave: our expectation that full year revenue will decline at a low double-digit percentage rate has not changed

Dave: in summary we exceed our expectations in north america during the first quarter and th we are modestly improving our full year expectation for the region to now be down fourteen to sixteen percent

David Bergman: Revenue in a Mayo was flat on a reported and currency neutral basis with strength in our DTC business partially offset by a slight decline in wholesale. A-pack revenue was down 10% or down 7% on a currency neutral basis driven by declines in our wholesale and DTC businesses amid a softening macro that impacted consumer traffic and a highly competitive and promotional environment in the region. In Latin America, revenue was up 16% or up 12% on a currency neutral basis with solid growth among regional distributors.

Dave: However, the North American improvement in our full-year forecast is expected to be offset by increasing market pressures in APAC for the balance of the year.

David Bergman: Next, we expect a low single-digit percentage decline in our international business. Within that, I'd like to give some regional color given the divergence in recent results between APAC and EMEA, and thus balance of year expectations. For Fiscal 25, we expect revenue in EMEA to be flat as we continue to protect the brand strength we've built in the region amid an uncertain macro environment. In APAC, we anticipate revenue will be down at a high single-digit percentage rate, reflecting lower consumer demand and traffic.

Dave: Next, we expect a low single-digit percentage decline in our international business.

Dave: Within that, I'd like to give some regional color given the divergence in recent results between APAC and EMEA, and thus balance of year expectations.

Speaker Change: for fiscal twenty-five we expect revenue in emaya to be a flat as we continue to prote brand strength we' built in the region amitt uncertain macro environment

David Bergman: From a channel perspective, first quarter wholesale revenue was down 8%, driven by softer demand in our full price and distributor businesses along with lower sales to the off price channel. Direct consumer revenue declined 12%, with a 25% decline in e-commerce as we work to evolve this channel to a more premium positioning via lower promotions and discounts. And sales from our own and operator retail stores were down 3%. Licensing was down 14% due to declines in our North American and Japanese businesses.

Speaker Change: In APAC, we anticipate revenue will be down at a high single-digit percentage rate, reflecting lower consumer demand and traffic trends.

David Bergman: Moving to gross margin, although we saw a significantly better-than-anticipated result in our first quarter, our expectation for a 75 to 100 basis point improvement for the full year has not changed. There are three main reasons for this Q1 overdrive not passing through to the full year. First, emerging ocean freight cost headwinds. Second, developing negative impacts from changes in foreign currency.

Dave: moving a gross margin

Dave: although we saw a significant better than anticipate a result in our first quarter our expectation for a seventy-five to one hundred basis point improvement for the full year has not changed

Dave: There are three main reasons for this Q1 overdrive not passing through to the full year. First, emerging ocean freight costs headwinds.

Dave: second developing negative impacts from changes in foreign currency and third a more unfavorable channelmix d to lower licensing sales and challenge margins in the off-price channel

David Bergman: And third, a more unfavorable channel mix due to lower licensing sales and challenged margins in the off-price channels. Relative to SG&A, excluding the litigation reserve expense and the midpoint of total estimated charges and related expenses of our restructuring plan, adjusted SG&A is expected to decline at a low to mid single-digit percentage rate. This includes anticipated savings of approximately $40 million in fiscal 25 from restructuring actions this year.

David Bergman: By product type, a parallel revenue was down 8% with declines across most categories partially offset by relative strength and golf. Footwear was down 15% with declines across most categories, partially all set by relative strength in outdoor and golf. And our accessories business was down 5%. Our first quarter gross margin was up 110 basis points to 47.5%. This increase was driven by 170 basis points of pricing benefits due to lower levels of discounting and promotions, mainly in our direct consumer business because of our actions to drive a more premium positioning of our brand.

Dave: Relative to SG&A, excluding the litigation reserve expense and the midpoint of total estimated charges and related expenses of our restructuring plan, adjusted SG&A is expected to decline at a low to mid single-digit percentage rate.

Dave: This includes anticipated savings of approximately $40 million in fiscal 25 from restructuring actions this year.

David Bergman: Adjusted operating income is now anticipated to reach $140 to $160 million, up $10 million from our prior estimate, and Adjusted Diluted Earnings Per Share is expected to be $0.19 to $0.22. Next, I'd like to give some color on our expectations for our second quarter, fiscal 25, starting with revenue, which we expect to be down approximately 12% compared to the prior year. This decline assumes continued wholesale software and proactive strategies to reduce promotional activities in our DTC Business, particularly in North American e-commerce.

Dave: Adjusted operating income is now anticipated to reach $140 to $160 million, up $10 million from our prior outlook.

David Bergman: And 40 basis points of supply chain benefits related to lower product costs and lower inventory reserves, partially all driven by our first quarter overdrive. These benefits were partially all set by 60 basis points of headwinds from unfavorable regional and channel mix shifts and 50 basis points of unfavorable foreign currency impacts. Our first quarter gross margin out performance relative to the outlook we gave in May was due to three main factors. First, we were even less promotional than planned in our DTC business, as we started the test strategies for also reducing promotion activity in our factory house outlet stores, including less depth and discounts, which was not contemplated in our prior outlook.

Dave: an adjusted diluted earnings per share is expected to be ' nineteen to twenty-two cents

David Bergman: Second quarter gross margin is anticipated to be up 20 to 30 basis points due to benefits from lower product costing and less DTC discounting, partially offset by more expensive ocean freight and unfavorable foreign currency impact. Adjusted SG&A is expected to decline at a high single-digit rate in the second quarter, partially driven by approximately 4 to 5 percentage points from an anticipated insurance recovery related to litigation expenses paid in prior periods.

Speaker Change: next i'd like to give some color on our expectations for our second quarter fiscal twenty-five starting with revenue

David Bergman: Additionally, this decline includes lower expenses related to head count reductions and a shift in the timing of marketing expenses, which will be considerably higher in our third quarter. This takes us to an expected second quarter adjusted operating income of $110 to $120 million and an adjusted diluted earnings per share of $0.18 to $0.20. Finally, some color on how we expect our cash to evolve in fiscal 25. After funding our legal settlement payment in the second quarter with cash on hand and our expected cash flow generation in fiscal 25, we expect to end the year with approximately $500 million in cash and no borrowings outstanding on our $1.1 billion revolver.

Dave: which we expect to be down approximately 12% compared to the prior year. This decline assumes continued wholesale softness and proactive strategies to reduce promotional activities in our DTC business, particularly in North American e-commerce.

Dave: thesecond quarter gross margin is anticipated to be up twenty to thirty basis points due to benefits from lower product costing and less dtc discounting partially offset by more expensive ocean freight and unfavorable foreign currency impacts

David Bergman: Second, inventory reserve needs were lower than planned, given a lower inventory balance and healthier overall composition. Third, we had some additional trailing benefits from year over year freight cost improvements compared to what was anticipated in our prior outlook. Moving down the PNL, our SNA expenses increased 42% to 837 million in the first quarter, excluding a litigation reserve, net of and insurance receivable and transformation expenses, adjusted SNA expenses were down 6% to 555 million.

Dave: Adjusted SG&A is expected to decline at a high single-digit rate in the second quarter, partially driven by approximately four to five percentage points from an anticipated insurance recovery related to litigation expenses paid in prior periods.

Speaker Change: Additionally, this decline includes lower expenses related to headcount reductions and a shift in the timing of marketing expenses, which will be considerably higher in our third quarter.

Speaker Change: this takes us to an expected second quarter adjusted operating income of one hundred and ten to one hundred and twenty million

David Bergman: This was mainly due to ongoing cost management actions, including headcount reductions and lower marketing expenses for the quarter. During the quarter, we recognized 25 million of restructuring charges and incurred 9 million of transformational expenses booked in SNA. We have now realized 34 million of the estimated 70 to 90 million in anticipated charges and expenses under our existing plan. Bringing this together, we had an operating loss of 300 million, or excluding the litigation reserve, transformation expenses and restructuring charges, are adjusted operating income with 8 million.

Speaker Change: and an $0.18 to $0.20 of adjusted diluted earnings per share.

Speaker Change: Finally, some color on how we expect our cash to evolve in Fiscal 25.

Speaker Change: after funding our legal settlement payment in the second quarter with cash on hand and our expected cash flow generation in fiscal twenty-five we expect to end the year with approximately five hundred million and cash and no borrowings outstanding on our one point one billion revolver

Operator: Now, to close out today's prepared remarks, I'd underscore that we are encouraged by the early progress we're making to reconstitute the Under Armour brand and are tracking well against our strategy. With a leadership team and culture that gets more decisive quarter by quarter, we will continue to test and learn as we optimize or protect this health strategy, and we are confident in our ability to establish the premium positioning we know the Under Armour brand deserves and set a higher quality revenue base that leads to improved sustainable growth and profitability over the long term.

Speaker Change: now to close out today's prepared remarks i'd underscore that we are encouraged by the early progress we're making a reconstitutution the younger arorour brand and are tracking well against our strategies

David Bergman: On the bottom line, we realized a diluted loss per share of 70 cents, or an adjusted diluted earnings per share of one cent. These results were head of our outlook due to our revenue and gross margin overdrive and better SNA expense control. From a balance sheet perspective, inventory was down 15% compared to last year, which was ahead of our expectations due to our revenue outperformance and effective inventory management. We continue to expect that our year end inventory will be in line with fiscal 24.

Speaker Change: With a leadership team and culture that gets more decisive quarter by quarter, we will continue to test and learn as we optimize our protective health strategy, and we are confident in our ability to establish the premium positioning we know the Under Armour brand deserves.

Speaker Change: and set a higher quality revenue base that leads to improve sustainable growth and profitability over the long term

Operator: With that, we'll open it up for questions. Operator? We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone. If using a speakerphone, please pick up your headset before pressing the keys.

Speaker Change: With that, we'll open it up for questions. Operator?

Speaker Change: We will now begin the question and answer session.

Speaker Change: To ask a question, you may press star then 1 on your telephone keypad.

David Bergman: At the end of the quarter, after paying down the remaining 81 million outstanding balance of our convertible senior notes and purchasing 40 million of class C common stock, which retired 5.9 million shares, we had no borrowing under our 1.1 billion revolving credit and a strong cash position of 885 million. Shifting next to our fiscal 25 outlook, our expectation that full-year revenue will decline at a low double-digit percentage rate has not changed.

Speaker Change: If using a speakerphone, please pick up your headset before pressing the keys.

Operator: To withdraw your question, please press star 2. At this time, we'll pause momentarily to assemble our... Our first question will come from Jay Sole with UBS. You may now go. Good. Thank you so much.

Speaker Change: To withdraw your question, please press star then 2.

Speaker Change: At this time, we'll pause momentarily to assemble our roster.

Speaker Change: Our first question will come from Jay Sole with UBS. You may now go ahead.

Jay Sole: Kevin, it's clear you see some good progress happening in the business. Can you just tell us about what gives you calm? confidence in the company's ability to deliver on the sales growth guidance that's implied in the guidance for the second half of the year and what you see happening there. Thank you so much.

Jay Sole: Great. Thank you so much. Kevin, it's clear you see some good progress happening in the business. Can you just tell us about, you know, what gives you confidence in, you know, the company's ability to deliver on the sales growth guidance that's implied in the guidance for the second half of the year and what you see happening there? Thank you so much.

David Bergman: In summary, we exceeded our expectations in North America during the first quarter, and thus we are modestly improving our full-year expectation for the region to now be down 14-16%. However, the North American improvement in our full-year forecast is expected to be offset by increasing market pressures in APAC for the balance of the year. Next, we expect a low single-digit percentage decline in our international business. Within that, I'd like to give some regional color given a divergence in recent results between APAC and AMAIA and thus balance of year expectations.

Kevin Plank: Yeah, thanks, Cher. I believe that we're... I think we've got a really healthy view of the business right now. I think that, you know, what we did on the last call is we put ourselves in a position to make the best decisions for the brand. You know, I've introduced this term sports house that we took to our partners and, frankly, to our team and anyone around this business of just understanding sort of getting lost in the moment of the day. We recognize where we are. We're not crazy about it, but we're also doing something to change the weather, I think.

Kevin Plank: Yeah, thanks, Cher. I believe that we're...

Kevin Plank: I think we've got a really healthy...

Kevin Plank: view of the business right now. I think that, you know, what we did on the last call is we put ourselves in a position to make the best decisions for the brand.

Speaker Change: I've introduced this term sports house that we took to our partners.

Kevin Plank: Frankly to our team and anyone around this business of just understanding of sort of getting lost up in the moment of the day. We recognize where we are. We're not crazy about it, but we're also doing something to change, I think, the weather.

Kevin Plank: And so the effect that we're having, I think, is number one, just slowly, prudently putting the best team together, which is everything. I think really getting after our strategy, which is something that, you know, I don't think it's been off. I think it's been a matter of execution.

David Bergman: For fiscal 25, we expect revenue in AMAIA to be a flat. As we continue to protect the brand strength we've built in the region amid an uncertain macro environment. In APAC, we anticipate revenue will be down at a high single-digit percentage rate, reflecting lower consumer demand and traffic trends. Moving to Gross Margin, although we saw a significant better than anticipated result in our first quarter, our expectation for a 75-100 basis-point improvement for the full-year has not changed.

Kevin Plank: And so the effect that we're having, I think, is, number one, just slowly, prudently putting the best team together, which is everything, I think.

Kevin Plank: really getting after our strategy, which is something that...

Kevin Plank: And so, making sure that our team is super clear on what the objectives are and what the definition of success is. And so, you know, the addition of the ability to attract A-plus talent, like bringing Eric on board, is probably a great proof positive that we're heading in the right direction with that. So I feel good and, you know, I think there are a lot of macro things that are going on right now that may affect what or where we are in the world.

Kevin Plank: You know, I don't think it's been off, I think it's been a matter of execution, and so making sure that our team is super clear on what the objectives are and what the definition of success is. And so, you know, the addition of the ability to attract A-plus talent like bringing Eric on board is probably a great proof positive that we're, you know, heading in the right direction with that.

Kevin Plank: So, I feel good and, you know, I think there's a lot of macro things that are going on right now that may affect what or where we are in the world.

David Bergman: There are three main reasons for this Q1 overdrive not passing through to the full year. First, emerging ocean freight cost headwinds. Second, developing negative impacts from changes in foreign currency. And third, a more unfavorable channel mix to the lower licensing sales and challenge margins in the off-priced channel. Relative to S-GNA, excluding the litigation reserve expense and the midpoint of total estimated charges and related expenses of our restructuring plan, adjusted S-GNA is expected to decline at a low to mid-single-digit percentage rate.

Kevin Plank: But you know, we've got our heads down, and, you know, there's certainly no, there's not a lot of high fives yet, but there's definitely a growing sense of, in terms of what we've accomplished to date. There's definitely a sense of what's coming, and we're very proud of that. Okay. Thank you so much.

Kevin Plank: But, you know, we've got our head down and, you know, there's certainly no...

Kevin Plank: There's not a lot of high fives yet, but there's definitely a growing sense of, in terms of what we've accomplished to date, but there's definitely a sense of what's coming and we're very proud of that.

Speaker Change: Got it. Okay, thank you so much.

Jay Sole: Thank you, Jay.

Jay Sole: Thank you, Jay. Our next question will come from Bob Drubal with Google. You may now go ahead. Good morning.

Speaker Change: Our next question will come from Bob Drubal with Guggenheim. You may now go ahead.

Bob Drubal: Just a couple of questions for me. The first one, Kevin, on the business overall, you seem to have a sharper direction on product. Can you comment a little more on the evolution of your marketing, how long you think you will feel more confident about that, and then, you know, when you think about brand marketing, what's working, what's not working, you know, where do you think you can do a better job, and what does Eric bring to the table on that? Thank you.

Bob Drubal: Good morning. Just a couple of questions for me. The first one, Kevin, on the business overall, you seem to have a sharper direction in product.

David Bergman: This includes anticipated savings of approximately 40 million in fiscal 25 from restructuring actions this year. Adjusted operating income is now anticipated to reach 140 to 160 million. Up to 10 million from our prior outlook and adjusted deluded earnings per share is expected to be 19 to 22 cents. Next, I'd like to give some color on our expectations for our second quarter fiscal 25 starting with revenue, which we expect to be down approximately 12 percent compared to the prior year.

Bob Drubal: Can you comment a little more on the evolution of your marketing, how long until you feel more confident about that? And then when you think about the brand marketing, what's working, what's not working? Where do you think you can do a better job and what does Eric bring to the table on that? Thanks.

Kevin Plank: On the last call, I think we did a good job laying out the importance of product, story, and region and those three things working together. We've also done a good job as part of the presentation that we took, you know, really around the world to our key partners and teammates, etc. And, you know, we told them that what's critical for Under Armour to do is to make sure that, you know, we're bringing in talent.

David Bergman: This decline assumes continued wholesale softness and proactive strategies to reduce promotional activities in our DTC business, particularly in North American e-commerce. Second, quarter gross margin is anticipated to be up 20 to 30 basis points due to benefits from lower product costing and less DTC discounting, partially offset by more expensive ocean freight and unfavorable foreign currency impacts. Adjusted S-GNA is expected to decline at a high single-digit rate in the second quarter, partially driven by approximately 4 to 5 percentage points from an anticipated insurance recovery related to litigation expenses paid in prior periods.

Kevin Plank: And I think if you look at the way that this table has evolved, the executive leadership team table has evolved, you know, over the last, frankly, 8 to 10 months, it's pretty significant. And, you know, product was a metaphor that I used to describe where, you know, we brought in some, you know, A-plus talent between John Varvatos, Yaron White, and, of course, Yassine, who's heading that function.

David Bergman: Aditionally, this decline includes lower expenses related to head count reductions and a shift in the timing of marketing expenses, which will be considerably higher in our third quarter. This takes us to an expected second quarter adjusted operating income of 110 to 120 million, and an 18 to 20 cents of adjusted deluded earnings per share. Finally, some color on how we expect our cash to evolve in fiscal 25. After funding our legal settlement payment in the second quarter with cash on hand and our expected cash flow generation in fiscal 25, we expect to end the year with approximately 500 million in cash and no borrowings outstanding on our 1.1 billion revolver.

Speaker Change: 13 years, Carl Blakely 15 years, Jeanette Robertson, who is another dozen years at UA, we just have this.

Kevin Plank: But what makes them so powerful is the fact that they're joining a team of leaders and partners that we already have here in the business, Dan Larrarez, 13 years, Kyle Blakely, 15 years, Jeanette Robertson, who's another, you know, a dozen years at UA. We just have this, you know, a real depth, I think, of talent.

Speaker Change: Real depth I think of talent, so I feel the same way of.

Bob Drubal: The emphasis of someone like an Eric joining our business.

Speaker Change: Being able to balance out that troika of product story in region.

Speaker Change: What we can do from a storytelling standpoint.

Speaker Change: Obviously, the biggest need and I'll come back to marketing in the second the biggest need that we have is.

Speaker Change: We need to be aggressive in North America, and I, just want to go back to people and being able to reference a partner that I have in someone like her Trent who's leading there for us and so.

Kevin Plank: And so, I feel the same way about the impetus of someone like an Eric joining our business, of being able to balance out that Troika of product story and region of what we can do from a storytelling standpoint. And, you know, obviously, the biggest need, and I'll come back to marketing in a second, the biggest need that we have is, you know, we need to be aggressive in North America. And I just want to go back to people and be able to reference a partner that I have and someone like Cara Trent, who's leading there for us.

Speaker Change: There is definitely a new mix, but it is something which I think is a formula. So we're just we're stabilizing the business, we're being consistent with the strategy right now.

Kevin Plank: And so, you're – there's definitely a new mix, but it's something which I think is a formula. So, we're just stabilizing the business. We're being consistent with the strategy right now. And frankly, after, you know, a very – probably too long of a time, an extended period of time of the ability to bring in a professional like Eric, you know, who – my priorities when I got Eric here were, number one, just landing the plane with someone who is, you know, such a terrific A-plus talent in the industry. But I was also thinking about how we could get him horizontal as quickly as possible.

Speaker Change: And frankly after a very.

Bob Drubal: Probably too long of a time, an extended period of time of the ability to bring in a professional like Eric.

David Bergman: Now, to close out today's prepared remarks, I'd underscore that we are encouraged by the early progress we're making to reconstitute the Under Armour brand and are tracking well against our strategies. With a leadership team and culture that gets more decisive quarter by quarter, we will continue to test and learn as we optimize or protect this health strategy, and we are confident in our ability to establish the premium positioning we know the Under Armour brand deserves and set a higher quality revenue base that leads to improved, sustainable growth and profitability over the long term.

Speaker Change: You know who my priorities win.

Bob Drubal: Getting Eric here was number one just landing the plane with someone who was.

Bob Drubal: A terrific.

Bob Drubal: A plus talent from the industry, but it was also thinking about how we could get them horizontal as quickly as possible and so that's why the role of marketing is something that will really I think is the unlock for the brand.

Kevin Plank: And so, that's why the role of marketing is something that will really, I think, unlock the brand. The terrific products are important, but I do feel like we're a company that's been, you know, left more to just selling on the logo and a price tag next to it versus articulating the actual depth of the story that we have available, you know, about each incredible product that we build. So, you know, we're a company that spent, you know, half a billion dollars or will be spending half a billion dollars in marketing just last year and this year, and I'm not sure that that's being felt. And so, there's a tremendous opportunity for us to go after our 16- to 24-year-old varsity athlete consumer and do it in a very authentic way. We spent a lot of time just focused on the gym.

Bob Drubal: The terrific products are important but I do feel like we're a company that's been.

Bob Drubal: Left more to just selling on the logo and a and a price tag next to it versus articulating the actual depth of story that we have available about each incredible product that we build so.

Operator: With that, we'll open it up for questions. Operator?

Bob Drubal: We are a company that spent.

Bob Drubal: Half a billion dollars or would it be spending half a billion dollars in marketing just last year and this year and I'm not sure that that's felt.

Operator: We will now begin the question and answer session. To ask a question, you may press star than one on your telephone keypad. If using a speaker phone, please pick up your hands up before pressing Q. To start a question, please press star than Q.

Kevin Plank: And while that's important, we want to be focused on the field. We want to tell our story, you know, through that voice and the products that will come from it. And it's not just the time when these athletes are on the field either, but it's really focusing on the to and from and what sportswear can mean for us because I believe the opportunity for UA is different in sportswear than it is for other brands. But the way that we're going to convey that story is going to be a little bit different.

Bob Drubal: So theres a tremendous opportunity for us to go attack or 16 to 24 year old varsity athlete consumer and do it in a very authentic way we'd spent a lot of time just focused on the gym and while that's important.

Operator: At this time, we'll pause momentarily to assemble a roster.

Bob Drubal: We want to be focused on the field, we weren't articulate our story through that voice and the products that will come from and it's not just the time for these athletes on the field either but it's really focusing on the two and from them with sportswear can mean for us because I believe the opportunity for UA is different in sportswear then it maybe it is for for other brands, but the way that we're going to convey that story is going.

Jay Sole: Our first question will come from Jay Sol with UBS. You may now go ahead. Great. Thank you so much. Kevin, it's clear you see some good progress happening in the business. Can you just tell us about what gives you confidence in the company's ability to deliver on the sales growth guidance that's implied in the guidance for the second half of the year and what you see happening there. Thank you so much.

Bob Drubal: A little bit different we're going to do it through the authenticity that we have on the field court and pitch.

Bob Drubal: Thank you.

Bob Drubal: So.

Jay Sole: Yes, thanks, Jay. I believe that we're, I think we've got a really healthy view of the business right now. I think that what we did on the last call, we put ourselves in a position to make the best decisions for the brand. I'd introduced this term sports house that we took to our partners and frankly to our team and anyone around this business of just understanding of not sort of getting lost up in the moment of the day.

Bob Drubal: Our next question will come from Simeon Siegel with BMO capital markets.

Speaker Change: You May now go ahead.

Operator: We're going to do it through the authenticity that we have on the field, court, and pitch. Our next question will come from Simeon Siegel with BMO Capital Markets. You may now go ahead. Thanks. Hey, everyone. Good morning. Hope you're having a nice summer.

Simeon Siegel: Thanks, Hi, everyone, good morning, and a nice summer.

Simeon Siegel: So Kevin, nice to see the first step in the brand re-elevation. Just when you think through the North America resets and that 25% skew reduction you mentioned, could you elaborate a little bit more on how that plays in terms of reducing specific categories, specific sports, retail partners, price points? You alluded to it, but maybe any more thoughts on how you're going to approach that would be helpful. And just as you think about that reduction, how are you thinking about units versus price expectations within the Revenue Guide? Yeah, thanks, Simeon. I think we're going to be, you know, really thoughtful, as I said in my prepared remarks. This isn't going to be, you know, just one fell swoop.

Simeon Siegel: So Kevin nice to see the first step in the brand renovation just when you think through the North America resets in that 25% SKU reduction you mentioned could you elaborate a little bit more on how that plays in terms of reducing specific categories to explore its retail partners price points, just you alluded to it but maybe any more thoughts on how youre going to approach that would be helpful. And just as you think about that reduction how are you thinking.

Jay Sole: We recognize where we are. We're not crazy about it, but we're also doing something to change, I think, the weather. And so the effect that we're having, I think, is number one, just slowly, prudently putting the best team together, which is everything. I think really getting after our strategy, which is something that I don't think it's been off. I think it's been a matter of execution. And so making sure that our team is super clear on what the objectives are and what the definition of success is.

Speaker Change: Units versus price expectations within the revenue guidance. Thank you.

Speaker Change: Yeah. Thanks Simeon.

Speaker Change: I think we're going to be really thoughtful as I said in my prepared remarks.

Speaker Change: This isn't going to be.

Speaker Change: Just just one fell swoop, we're gonna be thoughtful we're gonna be strategic and surgical with where we decided to make.

Jay Sole: And so the addition of the ability to attract a plus talent like bringing Eric on board is probably a great proof positive that we're heading in the right direction with that. So I feel good. And I think there's a lot of macro things that are going on right now that may affect what are where we are in the world. But we've got our head down and there's certainly no, there's not a lot of high fives yet, but there's definitely a growing sense of in terms of what we've accomplished to date. But there's definitely a sense of what's coming and we're very proud of that. Thank you so much. Thank you, Jay.

Speaker Change: Trends, but frankly, the idea of a 25% SKU reduction it's as much of a metaphor for the organization today is there's not a person in the world who doesn't feel like they've got too much on their plate. So the ability to remove 25% of the work is an ambition for the team and with that you're reducing everything from factory visits to lab dip approvals and all the other work in basis that comes with it.

Kevin Plank: We're going to be thoughtful. We're going to be strategic and surgical with where we decide to make cuts. But frankly, the idea of the 25% skew reduction is as much of a metaphor for the organization today as there's not a person in the world who doesn't feel like they've got too much on their plate. So the ability to remove 25% of the work is an ambition for the team. And with that, you're reducing everything from factory visits to, you know, lab dip approvals and all the other work and basis that comes with it.

Kevin Plank: But, you know, as we've said, to be an Under Armour product, that's got to be a process. And that has to be something which has to be vetted and gone through in a way that it needs to be special. It can't just be another T-shirt or, you know, another shoe. It needs to be a true piece of performance product that actually makes, you know, helps make you better.

Speaker Change: But as we've said to be an under armour product.

Speaker Change: That's got to be a process and that has to be something which has to be vetted and gone through in a way which is.

Speaker Change: It needs to be special it can't just be another T shirt or.

Speaker Change:

Speaker Change: Other shoe it needs to be a true piece of performance product that actually makes it helps them make you better and what we haven't done is we haven't done a good enough job I believe communicating that and so ensuring that as we say in our vision statement provides you with performance products you never knew you needed and once you try them can't imagine living without.

Kevin Plank: And what we haven't done is we haven't done a good enough job, I believe, of communicating that. And so ensuring that, as we say in our vision statement, provides you with performance products you never knew you needed and once you try them, can't imagine living without feels like, you know, an opportunity that we need to get behind. I think it really becomes simple to Simeon that we're going to focus on our base layer compression product.

Bob Drbul: Our next question will come from Bob Drubel with Kuggenheim. You may now go ahead. Good morning. Just a couple of questions from me. On the first one, Kevin, on the business overall, you seem to have a sharper direction in product. Can you comment a little more on the evolution of your marketing? How long until you feel more confident about that? And then when you think about the brand marketing, what's working, what's not working? Where do you think you can do a better job and what does Eric bring to the table on that? Thanks. Thank you.

Speaker Change: It feels like the opportunity that we need to get behind so.

Speaker Change: I think it really becomes simple to sending is that we're going to focus on our base layer compression product.

Speaker Change: It's really just going back to the foundations of the business.

Kevin Plank: It's really just going back to the foundations of the business. But we also have some things that have been working out and being prudent for us, like our Unstoppable Collection. It's getting behind when we've got Sharon Licati who'll be competing this weekend in the marathon wearing our Velocity Elite 2 runner, which is incredible.

Speaker Change: But we also have some things that have been working out and being prudent for us like our own Stoppable collection.

Speaker Change: It's getting behind when we got sharing located that'll be competing this weekend in the marathon wearing our.

Kevin Plank: On the last call, I think we did a good job laying out the importance of product of story and region and those three things working. We've also done a good job as part of the presentation that we took really around the world to our key partners and teammates, et cetera. And we told them that what's critical for Under Armour to do is to make sure that we're bringing in aid talent. And I think if you look at the way that this table has evolved, the executive leadership team table has evolved over the last, frankly, eight to ten months.

Speaker Change: Velocity elite.

Speaker Change: Two runners is something which is incredible to slip speed program is something that we're going to get back behind but we want to make sure that under armour isn't just selling a brand on a T shirt. It's not just the logo it needs to be more and so contextualize and what that means for consumers is something which we're really definitely focused on.

Kevin Plank: The slip speed program is something that we're going to get back behind. We want to make sure that Under Armour isn't just selling a brand on a t-shirt. It's not just a logo.

Kevin Plank: It needs to be more. And so contextualizing what that means for consumers is something which we're really definitely focused on. And not trying to do everything. We're not trying to boil the ocean.

Speaker Change: Trying to do everything we're not trying to boil the ocean. So we want to be incredibly deliberate and.

Kevin Plank: So we want to be incredibly deliberate and specific with the products that we're going after and make sure that we're doing a great job of articulating the story as to why there are performance benefits. That's the thing for me that as I've had to sit and maybe watch the business from a distance, it's something where I'm looking and saying the unleash that we have and the ability to articulate the incredible stories of the powers of the fabrics, the moisture management, the compression, the regenerative capabilities that are in things like UA Rush or Vanish, as we call it today, these are the opportunities that we have. So every Under Armour product is something that is special and unique. And I feel like we're going to make sure that we get credit for that. That's really great.

Speaker Change: And specific with the products that we're going after and making sure that we're doing a great job of articulating the story as to why the performance benefits because that's the thing for me that is I've had to sit and sort of maybe watch the business from a distance.

Kevin Plank: It's pretty significant. And product was a metaphor that I used to describe as where we brought in some A-plus talent between John Barbados, you're on white, and of course, you're seeing who's heading that function up. But what makes them so powerful is the fact that they're joining a team of leaders of partners that we already have here in the business of Dan LaRera's 13 years, Kyle Blakely 15 years, Jeanette Robertson who's another dozen years at UA.

Speaker Change: It's something I'm looking at saying the unleashed that we have and the ability to articulate the incredible stories of the the powers of the fabrics the moisture management.

Speaker Change: The compression.

Speaker Change: Regenerative capabilities that are in things like you, a rush or vanish as we call. It today.

Speaker Change: These are the opportunities that we have so every under armour product is something which is special and unique and.

Speaker Change: I feel like we're going to make sure that we get credit for that.

Kevin Plank: We just have this, you know, a real depth, I think, of talent. So I feel the same way of, you know, of the impetus of someone like an Eric joining our business of being able to balance out that troika of product story and region of what we can do from a storytelling standpoint. And, you know, obviously the biggest need, and I'll come back to marketing in a second, the biggest need that we have is, you know, we need to be aggressive in North America.

Speaker Change: That's really great that's exciting Dave any thoughts on the units versus price in the guide and then just if I can also just throw one more.

Simeon Siegel: It's exciting. Dave, any thoughts on the unit versus price in the guide? And then just if I can also just throw a little more light on what you repurchase this quarter, how are you thinking about the approach to buybacks just given where the stock is? Seems like you're taking brand control and recognizing the cash. [inaudible] Sure.

Dave: What you repurchased this quarter how are you thinking about the approach to buybacks just given where the stock is seems like Youre rethinking brand control and recognizing the cash element. Thanks, guys sure. Yeah, I mean, I think adding on to what Kevin said.

David Bergman: Yeah, I mean, adding on to what Kevin said, from a price value perspective, we are definitely focusing more on ASP and ASP growth. When you think about the SKU reduction, you know, we are trying to target a little bit more reduction in kind of the good level product and protect and really be able to invest in kind of the better and best level product, all at the same time that we're, you know, working our way out of some of the deeper discounting and promotions, especially within North America e-com.

Kevin Plank: And I just want to go back to people and being able to reference a partner that I have in someone like Cara Trent who's leading there for us. And so there's definitely a new mix, but it's something which I think is a formula. So we're just we're stabilizing the business for being consistent with the strategy right now. And frankly, after, you know, a very, probably too long of a time and extended period of time of the ability to bring in, you know, a professional like Eric, you know, who, my priorities when, you know, getting Eric here was number one, just landed a plane with someone who was, you know, such a, a terrific A-plus talent from the industry, but it was also thinking about how we could get him horizontally as quickly as possible.

Speaker Change: From a price value perspective, we're definitely focusing more on asps and ASP growth.

Speaker Change: When you think about the SKU reduction, we're trying to target a little bit more reduction in kind of the good level product and protect and really build invest in kind of the better and best level product.

Speaker Change: All at the same time that we're working our way out of some of the deeper discounting and promotions, especially within North America E. Comm. So when you kind of bring that whole equation together that should lead to driving continued gross margin expansion, which we think is super important for the brand and for the overall business. So that is part of that strategy that comes.

David Bergman: So, when you kind of bring that whole equation together, you know, that should lead to driving continued gross margin expansion, which we think is super important for the brand and for the overall business. So, that is part of that strategy that comes into play and trying to make sure that we're balancing relative to SKU development and higher margin products versus lower margin products, and also how that plays into segmentation and continuing to kind of step forward better and better in how we segment, which we've taken some good strides in the last year or two, but, you know, there's still some more room to go there as well. You know, relative to the share buyback program, obviously, we are pleased to have the new $500 million program set up. We executed on $40 million of that in Q1.

Speaker Change: In the play.

Kevin Plank: And so that's why the role of marketing is something that really I think is the unlock for the brand. The terrific products are important, but I do feel like we're a company that's been, you know, left mortgages selling on the logo and a price tag next to it versus articulating the actual depth of story that we have available, you know, about each incredible product that we build. So, you know, we're a company that's spent, you know, half a billion dollars or it would be spending half a billion dollars in marketing, you know, just last year and this year.

Speaker Change: I'm trying to make sure that we're balancing.

Speaker Change: Relative to the SKU development and the higher margin products versus lower margin product and also how that plays into segmentation and continuing to kind of step step forward better and better in how we segment, which we've we've taken some good strides in the last year or two but there's still some more room to go there as well.

Speaker Change: You know relative to the share buyback program. Obviously, we are pleased to have the the new $500 million program set up we executed around $40 million of that in Q1 and.

Kevin Plank: And I'm not sure that that's felt. And so there's a tremendous opportunity for us to go attack our 16 to 24-year-old varsity athlete consumer and do it in a very authentic way. We spend a lot of time just focused on the gym. And while that's important, we want to be focused on the field. We want to articulate our story, you know, through that voice and the products that will come from it.

David Bergman: And, you know, understanding that we've had some pretty big cash outflows recently with the settlement and paying down the convertible debt, we are continuing to kind of look at our future cash flow and making sure that we've got the war chest that we want to continue to protect for any kind of curves in the road, you know, as we had to deal with recently, or, you know, being able to invest in new ideas and new talent and new experiences similar You know, I don't know that we're going to pursue the share buyback in a huge way this year, but we are going to continue to evaluate it each quarter and make moves as prudent, especially with, you know, thinking about where the stock price is right now.

Speaker Change: Understanding that we've had some pretty big cash outflows recently with the settlement.

Speaker Change: And paying down the convertible debt, we are continuing to kind of look at our future cash flow and making sure that we've got the war chest that we want to continue to protect for any kind of curves in the road.

Kevin Plank: It's not just the time where these athletes are on the field either, but it's really focusing on the two and from what sportswear can mean for us because I believe the opportunity for UA is different in sportswear than it maybe it is for for other brands, but the way that we're going to convey that story is going to be a little bit different. We're going to do it through the authenticity that we have on the field court and pitch. Thank you.

Speaker Change: As we had to deal with recently or being able to invest in new ideas and new talent and new experiences.

Speaker Change: Similar to the recent unless acquisition that we're working through so you know.

Speaker Change: I don't know that we're going to pursue the share buyback in a huge way this year, but we are going to continue to evaluate it each quarter and make moves as prudent especially with.

Simeon Siegel: Our next question, we'll go from Simeon Siegel with BMO Capital Markets. You may now go ahead. Thanks, everyone. Good morning. Hope you can have a nice summer. So Kevin, nice to see the first step in the brand renovation.

Speaker Change: Thinking where the stock prices right now.

David Bergman: Great. Thanks a lot, guys. Best of luck for the rest of the year. Thank you. Thank you. Our next question will come from Geoff Lowry with Redburn. He may now go ahead. Yeah, afternoon team. I appreciate that the US is your main focus at the moment, but could you talk a little bit more about the performance of the brand in and the A and A. How much is the market versus your own reset?

Speaker Change: Great. Thanks, a lot guys best of luck for the rest of year.

Speaker Change: Thank you. Thank you.

Simeon Siegel: Just when you think through the North America resets and that 25% few reduction you mentioned, could you elaborate a little bit more on how that plays in terms of reducing specific categories to explore its retail partners price points just you alluded to it, but maybe any more thoughts on how you're going to approach that would be helpful. And just as you think about that reduction, how are you thinking about units versus price expectations within the other revenue guide?

Speaker Change: Our next question will come from Josh <unk> with Redburn you May now go ahead.

Josh <unk>: Yeah. After maintained I appreciate that the U S. Since Youll main sites at the moment, but could you talk a little bit more about the performance of the brand in <unk>.

Speaker Change: Okay.

Speaker Change: APAC on how much is market since your research that the tendency in those regions. Thank you.

Simeon Siegel: Thank you. Thanks, Simeon. I think we're going to be really thoughtful. As I said in my prepare remarks, this isn't going to be just one-fell swoop. We're going to be thoughtful. We're going to be strategic and surgical with where we decide to make tremors. But frankly, the idea of the 25% skewed reduction, it's as much of a metaphor for the organization today. There's not a person in the world who doesn't feel like they've got too much on their plate.

Geoff Lowery: Thank you very much. We'll start with Europe, where we have a, you know, sort of an Under Armour, long term, and Kevin Ross, who's now running that business for us. And so it's someone who's a vet who's worked here in the States and obviously been over in Europe now, but just took over as recently as January or February of this year. But I think we're doing a really good job.

Speaker Change: Okay. Thank you very much.

Speaker Change: We'll start with Europe, where.

Speaker Change: We've got a sort of.

Speaker Change: And under armour.

Speaker Change:

Speaker Change: Long term and Kevin Ross Who's now running that business for us and so if someone who has a bad who's worked here in the states and obviously been over in Europe, now, but just took over.

Speaker Change: As recently as January or February of this year, but.

Simeon Siegel: So the ability to remove 25% of the work is an ambition for the team. And with that, you're reducing everything from factory visits to lab-dip approvals and all the other work and basis that comes with it. But as we've said, to be an underarmer product, that's got to be a process. And that has to be something which has to be vetted and gone through in a way which is it needs to be special.

Speaker Change: But I think we're doing a really good job number one we came from a good base in EMEA is probably our strongest region from a momentum standpoint, particularly in the U K.

Geoff Lowery: Number one, we came from a good base, and May is probably our strongest region from a momentum standpoint, particularly in the UK. And, you know, timely enough, actually, in France and Paris were, you know, sort of an underground favorite with what's happening at the Olympics right now.

Speaker Change: Timely enough actually in France in Paris, where sort of an underground favorite.

Speaker Change: With what's happening at the Olympics right now but.

Kevin Plank: But there's work to be done. I think we're doing a good job playing to the size of the business that we are. You know, we crossed a billion dollars in the past year, and that's something that gives us some size and scale. And what we're doing is we're doing it through the lens of authenticity on the pitch. We've got some, you know, incredible athletes like Tony Rudiger. We've got a great kid named Furman Lopez, as I spoke about, who's on the Spanish national team and will be competing against France in the final there.

Speaker Change: But there is work to be done I think we're doing a good job playing to the size of the business that we already know we crossed a $1 billion in.

Simeon Siegel: It can't just be another t-shirt or another shoe. It needs to be a true piece of performance product that actually helps make you better. And what we haven't done is we haven't done a good enough job, I believe, communicating that. And so ensuring that as we say in our vision statement, it provides you with performance products you never knew you needed. And once you try them, can't imagine living without feels like the, you know, an opportunity that we need to get behind.

Speaker Change: In the past year, and that's something which gives us some size and scale and what we're doing is we're doing it through the lens of authenticity of on the pitch and we've got some incredible athletes like Tony Ruediger, We've got a great kidney for him and Lopez as I spoke about is on the Spanish national team will be competing against France, and the final there and Theres really.

Simeon Siegel: So I think it really becomes simple, too, I mean, is that we're going to focus on our base layer compression product. It's really just going back to the foundations of the business. But we also have some things that have been working out and being proven for us like our unstoppable collection. It's getting behind when, you know, we've got Sharon Lecady that'll be competing this weekend in the marathon, wearing our velocity elite two runners is something which is incredible.

Kevin Plank: And there's really a lens, I think, that we're doing a really targeted approach in both men's and women's football on the pitch. And we're also staying really close to our partnerships. JD and SportsDirect are incredibly important to us.

Speaker Change: The lens I think that we're doing are really targeted approach in both men's and women's football on the pitch and we're also staying really close to our partnerships J D and sports direct are incredibly important to us.

Speaker Change: And as we see our growth and so the wholesales important but we also expect to grow our DTC business and we're investing in this you know accordingly and longer term.

Kevin Plank: And as we see our growth, and so wholesale is important, but we also expect to grow our TTC business. And we're investing in this, you know, accordingly and over the longer term. You know, it's an evolution of a quality story, not unlike what we've learned here in the US.

Speaker Change: It's an evolution of our quality story not unlike we've learned here in the U S.

Kevin Plank: We're applying some of the lessons of what we saw happen in the US, where we're not crazy about where we are right now in North America. And so we're, we are doing a pretty good job, I think, applying the lessons of how we make sure we can, you know, advance ourselves with what we do in Europe. And so I think we're being really patient with the business, which is why you're not seeing maybe a bigger accelerator there. We were, we're going to be a little more cautious and make sure, number one, aware of the macro environment, but really looking for quality and from a long-term standpoint. In APAC, it's a little bit more complicated.

Simeon Siegel: The slip speed program or something we're going to get back behind. But we want to make sure that underarmers in just selling, you know, a brand on a t-shirt. It's not just the logo. It needs to be more. And so contextualizing what that means for consumers is something which, you know, we're really definitely focused on. And not trying to do everything. We're not trying to boil the ocean. So we want to be incredibly deliberate and specific with the products that we're going after, and making sure that we're doing a great job of articulating the story as to why their performance benefits.

Speaker Change: We're applying some of the lessons of what we saw happen in the U S, where we're not crazy about where we are right now in North America.

Speaker Change: So we are doing a pretty good job I think applying the lessons of how do we make sure we can advance ourselves with what we do in.

Speaker Change: In Europe, and so I think we're being really patient with the business, which is why youre not seeing maybe a bigger accelerator. There is that we weren't we're going to be a little more cautious and make sure number one aware of the macro environment, but I'm really looking for quality and from a long term standpoint.

Simeon Siegel: Because that's the thing for me that as I've, you know, had to sit and sort of, you know, maybe watch the business from a distance. It's something where I'm looking at saying the unleashed that we have the ability to articulate the incredible stories of the powers of the fabrics, the moisture management, the compression, the regenerative capabilities that are in things like you a rush or vanishes we call today. You know, these are the opportunities that we have. So every underarmer product is something which is special and unique. And I feel like we're going to make sure that we get credit for that. That's really great. It's exciting.

Kevin Plank: Obviously, it's a massive region with its own climate, frankly, and something that we're dealing with. But the macro pressures there are something that we're aware of. I was over there in May, and I'll be back in September, working with our leader, Jason Archer, there as well. This region just requires a little more attention from the home office. So we're looking at how we can be more helpful to lean into our APAC business.

Speaker Change: In APAC, it's it's.

Speaker Change: It's a little bit more complicated is it obviously, it's a it's a massive region with its own climate, frankly, frankly, and something that we're we're dealing with but the macro pressures there or something that we're aware of.

Speaker Change: I was over there in in May and will be back in September working with our leader, Jason Archer there as well.

Speaker Change: Region, just requires a little more attention from the home office. So we're looking at how we can be more helpful to lean into our APAC business.

Kevin Plank: You know, from a size and scale standpoint, just to remind everyone on a global basis, UNRWA has more than 1,900 stores around the world. The majority of these are in APAC; the majority of those are, you know, in China.

Speaker Change: From a size and scale standpoint, just to remind everyone on a global basis under armour has more than 1900 stores around the world. The majority of these are in APAC. The majority of those are in China, but that's why we're gonna excited to get stuff in Korea back on tour in September which will be hopefully a bit of a fuse for getting the region going or at least for mining.

David Bergman: Dave, any thoughts on the unit versus price in the guide and then just if I can also just throw a more looking at what you repurchase this quarter. How are you thinking about the approach to buybacks just given where the stock is, seems like you're re-taking brand control and recognizing the cash. Gentlemen. Thanks guys. Sure. Yeah, I mean, I think, you know, adding on to what Kevin said, from a price value perspective, you know, we are definitely focusing more on ASP and ASP growth.

Kevin Plank: But that's why we're excited to get Stephen Curry back on tour in September, which will be, you know, hopefully, a bit of a fuse for getting the region going, or at least reminding people that we're there. But there's a lot to cut through from not only the global brands, but the local brands. So it's a little bit different.

Speaker Change: People that were there, but theres a lot to cut through it from not only the global brands, but the local brands. So it's a little bit little bit different and beyond China that you know I think that the macro is something with where we're just watching the consumer and some of the softening there.

Geoff Lowery: And beyond China, that, you know, I think that the macro is something which we're just watching the consumer and some of the softening there. Some of the other regions, what's happening in Japan or South Korea, are a bit complicated from an economic standpoint or a macroeconomic standpoint there. But, you know, we think our opportunity is great, and APAC is going to be a massive unlock for us too. So hopefully, that gives you a little bit of color.

David Bergman: When you think about the skew reduction, you know, we are trying to target a little bit more reduction in kind of the good level product and protect and really be able to invest in kind of the better and best level product. All at the same time that we're, you know, working our way out of some of the deeper discounted planning and promotions, especially within North America e-commerce. So when you kind of bring that whole equation together, you know, that should lead to driving continued gross margin expansion, which we think is super important for the brand and for the overall business.

Speaker Change: Some of the other regions of whats happening in Japan or.

Speaker Change: South Korea is a bit complicated from an economic standpoint, or a macroeconomic standpoint there.

Speaker Change: But we think our opportunity is large and.

Speaker Change: APAC is gonna be a massive unlock for us too. So hopefully that gives you a little bit of color.

Jim Duffy: That's great. Thank you so much. Thank you. Our next question will come from Jim Duffy with Stiefel. You may now go ahead. Thank you. Good morning. Hi Dave. Hi Kevin. Good morning, Jim.

Speaker Change: That's great. Thank you so much.

Speaker Change: Thank you.

David Bergman: So that is part of that strategy that comes into play and trying to make sure that we're balancing relative to the skew development and the higher margin product versus lower margin product and also how that plays in the segmentation and continuing kind of step forward. Better and better and how we segment, which we've we've taken some good strides in the last year or two, but, you know, there's still some more room to go there as well.

Speaker Change: Our next question will come from Jim Duffy with Stifel. You May now go ahead.

Kevin Plank: I want to talk about some of the management hires. You've added a lot of great talent, Eric, a great addition to the team. Kevin, the title of EVP of Brand Strategy, that suggests a lot of responsibility overlap with your historical areas of focus. Can you maybe speak to your vision for the partnership with Eric? Clearly, this was part of the discussion during the recruitment process. And then, with Eric on board, where do you expect to be spending more of your time? Yeah, thank you. You know, it's not it.

Jim Duffy: Hi, Thank you good morning, Hi, David Hi, Kevin.

Speaker Change: Good morning, Jim I wanted to talk about.

Speaker Change: So the management hires.

Speaker Change: There's a lot of great talent, Eric Great addition to the team.

Jim Duffy: Kevin the title of EVP of brand strategy that suggests a lot of responsibility overlap with your historical areas of focus can you maybe speak to your vision for the partnership with Eric Clearly this was part of the discussion during the recruitment process and then with Eric on Board, where do you expect to be spending more of your time.

David Bergman: You know, relative to the share buyback program, you know, obviously, we are pleased to have the new 500 million program set up. We executed on 40 million of that in Q1 and, you know, understanding that we've had some pretty big cash outflows recently with the settlement and paying down the convertible debt. You know, we are continuing to kind of look at our future cash flow and making sure that we've got the war chest that we want to continue to protect for any kind of curves in the road, you know, as we had to deal with recently or, you know, being able to invest in new ideas and new talent and new experiences, similar to the recent on less acquisition that we're working through.

Kevin Plank: Thanks, Jim. It doesn't feel too different than, you know, it's maybe a little bit of free bird, but when you built the brand the first time, you never really focused on sort of complementing skill sets as much as you said if you could get a pro. I'm a pretty good generalist.

Speaker Change: Yes. Thank you.

Speaker Change: Thanks, Jim It doesn't feel to different then.

Speaker Change: It's maybe a little bit of free bird, but building the brand and the first time.

Speaker Change: You've never really focused on on sort of complementing skill sets as much as you said if you can get a pro I'm a pretty good generalists. So I got the ability to plug in other places.

Speaker Change: Bringing our professional like Eric on Hu.

Speaker Change: He's got to he's a multidisciplinary expert as well, but with having his focus over marketing and frankly, our strategy work as I said as a way to get Eric horizontal in the organization that he can have that impact and where I think our biggest need is right now.

David Bergman: So, you know, I don't know that we're going to pursue the share buyback in a huge way this year, but we are going to continue to evaluate it each quarter and make moves as prudent, especially with, you know, thinking where the stock price is right now. Great. Thanks a lot guys, best luck for the rest of the year. Thank you.

Kevin Plank: So I have the ability to plug into other places and, you know, bring in a professional like Eric who is, you know, he's got he's a multidisciplinary expert as well. But with having his focus on marketing, and frankly, our strategy work, as I said, is a way to get Eric horizontal in the organization so that he can have that impact. And where I think our biggest need is right now is really in that product, region, and story balance.

Speaker Change: Is really and that that product.

Speaker Change: Region and story balance and we just we haven't had that I think that strength.

David Bergman: Our next question will come from Jeff Lowry with Redburn.

Speaker Change: <unk> leadership, that's required for us to be successful so.

Jeff Lowery: You may now go ahead. Yeah, after no team, I appreciate that the US is your main focus at the moment, but could you talk a little bit more about the performance of the brand in and the A and APAC and how much is market versus your own reset activity in those regions. Thank you.

Eric Litkey: Eric is going to be leaning in there and responsible for building that out and I'm not lost on what is that going to mean for me because theres plenty of other things to do.

Eric Litkey: And that's where I think it is my job is to make sure that im leveling up let.

Speaker Change: Let me just give a little color on the acquisition, but.

Speaker Change:

Speaker Change: Getting Eric here is that unless will continue to be its own independent organization for us and I.

Kevin Plank: Thank you very much. We'll start with Europe where, you know, we've got a sort of an underarm or long term in Kevin Ross who's now running that business for us. And so it's someone who's a bad who's worked here in the States and obviously been over in Europe now, but just took over as recently as January or February of this year. But I think we're doing a really good job. Number one, we came from a good base and May is probably our strongest region from a momentum standpoint, particularly in the UK and, you know, timely enough actually in France and Paris were sort of an underground favorite with what's happening at the Olympics right now.

Speaker Change: I think bringing in sort of the ESG approach that they have with plant based regenerative fashion is something that is something which is a priority in the organization and Eric of course will help us articulate that.

Speaker Change: But I think what we want to do is to make sure that the largest need that we had was just getting someone who can be their partner to you've seen into Kara decision rights and the operating model is one of the things that always comes up and one of the things that Eric specifically did.

Kevin Plank: But there's there's there's work to be done. I think we're doing a good job playing to the size of the business that we are, you know, we crossed a billion dollars in the past year. And that's something which gives us some size and scale. And what we're doing is we're doing it through the lens of authenticity of, you know, on the pitch. We've got some, you know, incredible athletes like Tony Rudiger.

Speaker Change: At Audi <unk>.

Eric Litkey: Back in 13 or 14, when he took over there which is working on the operating model of how product and and region and.

Speaker Change: And marketing all work together, so that'll be a real balance in a real plus for us. So I'm not worried about having things to do just lucky and appreciative that we're able to attract someone like Eric. So I think it's the beginning of many more to come but.

Kevin Plank: And we just haven't had that, I think that strength of leadership that's required for us to be successful. So Eric is going to be leaning in there and responsible for building that out. And I'm not lost on what that going to mean for me, because there's plenty of other things to do.

Kevin Plank: And that's where I think it is my job to make sure that I'm leveling up. Let me just give a little color on the acquisition. But, you know, getting Eric here is that it will continue to be its own independent organization for us.

Kevin Plank: And, you know, I think bringing in sort of the ESG approach that they have with plant-based regenerative fashion is something that is something that is a priority in the organization. And Eric, of course, will help us articulate that. But I think what we want to do is make sure that the largest need that we had was just getting someone who can be the partner to Yassine and to Kara. You know, decision rights and the operating model are one of the things that always come up.

Kevin Plank: And one of the things that Eric specifically did, you know, at Adi back in 13 or 14, when he took over there, was just working on the operating model of how product and and region and and and marketing all work together. So that'll be a real balance and a real plus for us. So I'm not worried about having things to do.

Kevin Plank: I'm just lucky and appreciative that we're able to attract someone like Eric. So I think it's the beginning of many more to come. But I've got to tell you just one thing, maybe on a personal level, which is it feels like there's definitely something a bit new and a bit of a shift. And so we're not declaring victory. We're not beating our chests for sure.

Speaker Change: I've got to tell you just one thing maybe on a personal level. It just it feels like there's definitely there's something a bit of new and a bit of a shift and so we're not declaring victory were not beating our chests for sure, but we've got a lot of work to do but we like the direction that we're heading in right now.

Kevin Plank: We've got a great kid named for him and Lopez as I spoke about is on the Spanish national team will be competing against France in the final there. And there's really a lens. I think that we're doing a really targeted approach in both men's and women's football on the pitch. And we're also staying really close to our partnerships, JD and sports director are incredibly important to us. And as we see our growth and so the whole sale is important, but we'll also expect to grow our TTC business and we're investing in this, you know, accordingly and longer term.

Jim Duffy: But we've got a lot of work to do, but we like the direction that we're heading in right now. Great, thanks for that.

Speaker Change: Great. Thanks for that and then Dave just a quick one on the DTC margins can you remind us when you will anniversary the less promotional approach in DTC and get to more normalized comparisons on the DTC margins.

David Bergman: And then, Dave, just a quick one on the D2C margins. Can you remind us when you'll anniversary the less promotional approach in D2C and get to more normalized comparisons on the D2C margins? Yeah, it's a great question.

Dave: Yeah, that's a great question I mean generally speaking.

Dave: It'll continue to be a benefit for us through the year, a little bit bigger than the front half versus the back half and then as we step out of this fiscal year, we should be more on a comparable basis relative to.

Kevin Plank: You know, it's an evolution of a quality story, not unlike we've learned here in the US. We're applying from the lessons of what we saw, you know, happen in the US where we're not crazy about where we are right now in North America. And so we're we are doing a pretty good job. I think applying the lessons of how do we make sure we can, you know, advance ourselves with what we do in Europe.

David Bergman: I mean, generally speaking, you know, it'll continue to be a benefit for us through the year, a little bit bigger in the front half versus the back half. And then as we step out of this fiscal year, we should be more on a comparable basis relative to, you know, the econ, gross margins, and promotion levels as we've been, you know, kind of chipping away to get to a really nice healthy level by the end of this fiscal year.

Dave: The E com gross margins promotion levels as we've been kind of chipping away to get to a really nice healthy level by the end of this fiscal year.

David Bergman: You know, and we're continuing to kind of test on the factory house side, which could be something that we play into more to continue to become more premium as we step into fiscal 26. Thank you, guys. You're welcome.

Kevin Plank: And so I think we're being really patient with the business, which is why you're not seeing maybe a bigger accelerator there is that we weren't we're going to be a little more cautious and make sure number one aware of the macro environment, but really looking for quality from a long term standpoint. And APAC it's it's a little bit more complicated is it obviously it's a it's a massive region with with its its own climate, frankly, frankly, and something that we're dealing with, but the macro pressures there are something that we're aware of.

Speaker Change: And we're continuing to kind of test on the factory house side, which could be something that we play into more to continue to become more premium as we step into fiscal 'twenty six.

Speaker Change: Thank you guys.

Jim Duffy: Youre welcome Jim.

Paul Lejuez: Our next question will come from Paul Lejuez with Citi. You may now go ahead. Hey, thanks guys. I just wanted to ask a question on your guidance. You updated the full year, and you gave the third quarter. I just wanted to make sure I heard correctly.

Jim Duffy: Our next question will come from Paul <unk> with Citi. You May now go ahead.

David Bergman: I think you said 110 to 120, and that would imply a pretty large percentage of the full year coming from the first half, much smaller from the second half. I just want to understand what your outlook is for the second half, both from a gross margin and SG&A perspective, which would lead to some pretty weak numbers in the second half based on the guidance, if I heard it correctly. And then, just separately on the factory business, I think you mentioned mixed results when you adjusted prices.

Paul: Hey, Thanks, guys just wanted to ask a question on your <unk>.

Kevin Plank: I was over there in in May and we back in September working with our leader Jason archer there as well. This region just requires a little more attention from the home office. So we're looking at how we can be more helpful to lean into our our APAC business. You know, from a size and scale standpoint, just to remind everyone on a global basis, under what has more than 1,900 stores around the world.

Paul: You updated the full year, you gave third quarter I just wanted to make sure I heard correctly I think you said, one one to $1 20.

Speaker Change: EBIT.

Speaker Change: And that would imply.

Speaker Change: Large percentage of the full year coming from first half much smaller in the second half.

Speaker Change: Just wanted to understand what your outlook is in the second half both from a gross margin and SG&A perspective that would lead to a.

Kevin Plank: The majority of these are an APAC majority of those are in China, but that's why we're going to excited to get Steph and Curry back on tour in September, which will be, you know, hopefully a bit of a fuse for getting the region going, or at least reminding people that we're there. But there's a lot to cut through from not only the global brands, but the local brands. So it's a little bit little bit different.

Speaker Change: A pretty weak numbers I think in the second half based on the guidance if I heard it correctly and then just separately on the factory business. I think you mentioned mixed results. When you adjusted prices. If you could just talk about what you saw as you move prices around and what the ultimate blend for the factory business in terms of number of stores.

David Bergman: If you could just talk about what you saw as you moved prices around and what the ultimate plan is for the factory business in terms of the number of stores and what role that serves within the company. Thanks.

Kevin Plank: And beyond China that, you know, I think that the macro is something which we're just watching the consumer and some of the softening there. Some of the other regions of what's happening in Japan or South Korea is a bit complicated from an economic standpoint or macro economic standpoint there. But, you know, we think our opportunity is large and, you know, APAC is going to be a massive unlock force too.

Speaker Change: That served within the company.

David Bergman: When you think about kind of the front half versus the back half, a couple things come into play there. You know, first of all, when you think about Q1 and that overdrive, and then, you know, what does that mean for the full year? Again, keep in mind that, you know, in the back half, we are expecting a little bit more revenue pressure from developing APAC revenue pressure. We're also expecting a little bit higher ocean freight costs than we originally planned.

Speaker Change: Sure Paul when you think about kind of front half versus back half a couple of things come into play there first.

Speaker Change: First of all when you think about Q1.

Speaker Change: And that overdrive, and then what does that mean for the full year.

Speaker Change: Again keep in mind that you know in the back half we are expecting a little bit more developing APAC revenue pressure. We're also expecting a little bit higher ocean freight cost than we originally planned there's also been some increasing FX pressure.

Kevin Plank: So hopefully that gives you a little bit of color. That's great. Thank you so much.

David Bergman: There's also been some increasing FX pressure. And, you know, there's a little bit of caution that we have as well, just when you think about kind of the recent economic trends. But in general, from an operating income perspective, historically, we've definitely run higher amounts in the first half of the year and a little bit lower in the second half of the year.

Jim Duffy: Thank you.

Jim Duffy: Our next question will come from Jim Duffy with Diffle. You may now go ahead. Thank you. Good morning. Hi, Dave. Hi, Kevin. Good morning, Jim.

Speaker Change: And there's a little bit of caution that we have as well just when you think about kind of the recent economic trends.

Speaker Change: But in general from an operating income perspective, historically, we've definitely run a higher amounts in the first half of the year and a little bit lower in the back half of the year. Some of that if you think about Q2, that's historically a high revenue dollar quarter for us and it's also generally a higher gross margin percentage quarter for.

Kevin Plank: I want to talk about some of the management hires. You added a lot of great talent. Eric, a great addition to the team. Kevin, the title of EVP of brand strategy. That suggests a lot of responsibility overlap with your historical areas of focus. You may be speaking to your vision for the partnership with Eric. Clearly, this was part of the discussion during the recruitment process. And then with Eric on board, where do you expect to be spending more of your time?

Paul Lejuez: Some of that, if you think about Q2, that's historically a high revenue dollar quarter for us, and it's also generally a higher gross margin percentage quarter for us. So driving bigger gross margin dollars in Q2 is kind of a historical trend for us, and then that higher front half profitability is also kind of amplified this year by the planned insurance recovery relative to legal invoices paid prior to this year that I mentioned, and also shifting some of our planned marketing spend out to Q3 and Q4.

Speaker Change: Also driving bigger gross margin dollars in Q2 as is kind of a historical trend for us and then that higher front half profitability is also kind of amplified this year by the planned insurance recovery relative to legal invoices paid prior to this year that I mentioned and also shifting some of our planned market.

Kevin Plank: Yeah, thank you. It doesn't feel too different than it may be a little bit of free bird, but building the brand in the first time. You never really focused on complementing skill sets as much as you said. If you can get a pro, I'm a pretty good journalist. So I got the ability to plug other places and, you know, bringing up professional like Eric on who, you know, he's got he's a multidisciplinary expert as well.

Speaker Change: <unk> spend out to Q3 and Q4.

Paul Lejuez: And, you know, maybe the last thing I'd mention there is that the back half forecast also carries more incentive compensation compared to the prior year back half, where we were adjusting down, unfortunately, and reversing some of that incentive compensation that was recorded in earlier quarters last year. So when you add all those factors together, it points to the front half being, you know, a substantial portion of our full-year operating income, which is how we have things laid out in the plan.

Speaker Change: And maybe the last thing I would mention there is back half forecast also carries more incentive compensation compared.

Speaker Change: Compared to the prior year back half, where we were adjusting down Unfortunately, and reversing some of that incentive compensation that was recorded in earlier quarters last year. So when you add all those factors together it points to the front half being you know a substantial portion of our full year operating income, which is how we have things laid out in the plan.

Kevin Plank: But with having his focus over marketing and frankly, our strategy work, as I said, is a way to get Eric horizontal in the organization that he can have that impact. And where I think our biggest need is right now is really in that that product region and story balance. And we just we haven't had that I think that strength of leadership that's required for us to be successful. So Eric is going to be leaning in there and responsible for building that out.

Speaker Change:

Paul Lejuez: And on your second question relative to, you know, Factory House, I would say that, you know, we did step into testing some lower promotion levels and lower promotion levels, and we actually hadn't really planned on doing that. But as we stepped into that more deeply in e-com, and we were excited about the results there on e-com, we decided to start testing that a little bit on Factory House. And I would say that, you know, it was both the price level and the depth of the discount, and the results were really kind of mixed, to be honest.

Speaker Change: And on your second question relative to factory House, I would say that we did step into testing some some lower promotion levels and less promotion levels and we actually havent really planned on doing that but as we stepped into that more deeply in E. Com and we're excited about the results there on E com.

Kevin Plank: And I'm not lost on what is that going to mean for me because there's plenty of other things to do. And that's where I think it is my job is to make sure that I'm leveling up. Let me just give a little color on the acquisition, but, you know, getting Eric here is that unless we'll continue to be its own independent organization for us. And, you know, I think bringing in sort of the ESG approach that they have with plant-based regenerative fashion is something that is something which is a priority in the organization and Eric, of course, will help us articulate that.

Speaker Change: <unk> tied it to start testing that a little bit on factory House and I would say that you know it was both the price level the depth of the discount and the results were really kind of mix to be honest.

David Bergman: You know, we're experimenting, we're learning, we're seeking balance. We did give up a little bit of revenue when we did that, and so we're continuing to kind of test and learn on the Factory House side. But right now, I would say that the results from that are mixed, and we've got some more work to do. Thank you. Good luck.

Speaker Change: We're experimenting we're learning we're seeking balance.

Speaker Change: We did give up a little bit of revenue when we were doing that and so we're continuing to kind of test and learn on the factory outside but right now I would say that the results from that are mixed and we've got some more work to do.

Kevin Plank: But I think what we want to do is make sure that the largest need that we had was just getting someone who can be the partner to you seen and to Cara. You know, decision rights and the operating model is one of the things that always comes up and one of the things that Eric specifically did, you know, at Audi back in 13 or 14 when he took over there, was just working on the operating model of how product and and region and and and marketing all worked together. So that'll be a real real balance and a real plus for us. So I'm not worried about having things to do. I'm just lucky and appreciative that we were able to track someone like Eric.

Speaker Change: Thank you good luck.

Paul: Thanks, Paul.

Laurent Falasucci: Thanks, Paul. Our next question will come from Laurent Falasucci with BNB Paribas. You may now go ahead.

Speaker Change: Our next question will come from Laura followed suit.

Laura: With Dnb.

Laura: Louis.

Speaker Change: May now go ahead.

David Bergman: Oh, good morning. Thanks very much for taking my question. Dave, I wanted to ask for guidance. Should we still assume wholesale is down, low double digits, and DTC is down 10% for the year? And then, with e-commerce down 25%, is that the right way to think about it going forward? And are there any lessons learned that you think you can apply to the rest of the business from the pullback in promotions in e-commerce? Sure.

Laura: Good morning. Thank you very much for taking my question, Dave I wanted to ask.

David Bergman: Yeah, I would say that for the full year, you know, we still are looking at wholesale down kind of a low double-digit percentage, kind of in that 10 to 12 percent range, and then DTC being down approximately 10 percent or so, and that is mainly driven by our decisions to kind of reset the brand, especially in North America with the e-com pullback on promotions and also, you know, an elevated product assortment there. Relative to e-com specific, we're not necessarily giving guidance on that, but you would definitely see that being the over-indexed decrease within the DTC being down 10 percent, so definitely down more than 10 percent, maybe not the full 25 that we saw in Q1 when you think about the full year, but again, that is intentional.

Laura: For the guidance should we still assume wholesale down low double digits in DTC down 10% for the year and then with E Commerce.

Speaker Change: Down 25%.

Speaker Change: Is that the right way to think about it going forward is there are there any lessons learned that you think you can apply to the rest of the business from the pullback in promotions in ecommerce.

David Bergman: So I think it's the beginning of many more to come, but I've got to tell you just one thing, maybe on a personal level, which is it feels like there's definitely there's something a bit of new and a bit of a shift. And so we're not declaring victory. We're not beating our chest for sure, but we've got a lot of work to do, but we like the direction that we're heading in right now. Great. Thanks for that.

Speaker Change: Sure, Yes, I would say that on full year.

Speaker Change: We still are looking at wholesale down kind of a low double digit percentage kind of in that 10% to 12% range.

David Bergman: And then Dave, just a quick one on the D to see margins. Can you remind us when you'll anniversary the less promotional approach in D to see and get to more normalized comparisons on the D to see margins. Thank you. Yeah, that's a great question. I mean, generally speaking, you know, it'll continue to be a benefit for us through the year, a little bit bigger in the front half, versus the back half.

Speaker Change: And then DTC being down approximately 10% or so and that is mainly driven by our decisions to kind of reset the brand, especially in North America with the E com pull back on promotions and.

Speaker Change: Also an elevated product assortment there.

Speaker Change: Relative to E comm specific we're not necessarily giving guidance on that.

David Bergman: And then as we step out of this fiscal year, we should be more on a comparable basis relative to, you know, the ECOM gross margins of promotion levels as we've been, you know, kind of chipping away to get to a really nice healthy level by the end of this fiscal year. You know, and we're continuing to kind of test on the factor house side, which could be something that we play into more, to continue to become more premium as we step into fiscal 26. Thank you guys. You're welcome. Thank you.

Speaker Change: But you can you would definitely see that being the over indexed decrease within the DTC being down 10%, so definitely down more than 10% maybe not the full 25 that we saw in Q1.

Speaker Change: When you think about full year, but again that is intentional most of that is intentional as we continue to drive through those promotional decisions within North America.

David Bergman: Most of that is intentional as we continue to drive through those promotional decisions within North America. Hey Laurent, maybe I can just, let me pile on that too, because I think it's really instructive about what happened and what we're able to do through the lens of our full-price e-commerce website, which frankly hadn't been quite as full price a year ago. We're about, you know, about 65% of what we were selling a year ago was promotional and about 35% full price, and, you know, with what we did by significantly reducing promotion days, we didn't quite invert it, but we made significant progress in terms of getting to promote our full price sales.

Speaker Change: And halo around it maybe I can just.

Speaker Change: Let me, let me pile on that too.

Speaker Change: Because I think it's really instructive of what happened and what we're able to do through.

Paul Lejuez: Our next question will come from Paul Lejuez with the city. You may not go ahead. Thank you guys. I'm just going to have a good question on your guidance. You updated the full year. You gave third quarter. I just wanted to make sure I heard correctly. I think you said one 10 to 120 in EBIT. And that would imply pretty large percentage of the full year coming from the first half much smaller from the second half.

Speaker Change: Through the lens of our full price ecommerce website that frankly.

Speaker Change: Hasn't been quite as full price a year ago. We're about you know about 65% of what we were selling a year ago was promotional and about 35% full price and with what we did by reducing significantly reducing promotion days, we didn't quite inverted, but we made significant progress in terms of getting to promote our full price sales and.

Paul Lejuez: So just want to understand what your outlook is in the second half, both from gross margin, Nessie Nay, perspective that would lead to some pretty neat numbers. I think in the second half based on the guidance, if I heard it correctly. And then just separately on the factory business, I think you mentioned mixed results when you adjusted prices. You could just talk about what you saw as you move prices around and what the ultimate plan is for the factory business in terms of number stores and what role that serves within the company. Thanks.

David Bergman: And so what that did as well is not only did it help us with, you saw some of the gross margin flow through for ourselves, but it also helped the algorithms on our partner websites with, you know, the Amazon algorithm that goes around. And so you just watch a general rising tide raise all boats here.

Speaker Change: So what that did as well as not only did it help us with you saw some of the gross margin flow through for ourselves, but also helps the algorithms on our partner websites on the Amazon algorithm that goes around and so you just watch it a general rising vote raise alt a rising tide raises all boats here. So as that's occurring it's something that's pretty instructive as we're thinking about you know we keep talking about.

Kevin Plank: So as that happens, it's something that's pretty instructive as we're thinking about, you know, we keep talking about repairing the brand or what we're doing with the brand or how healthy the brand is right now. All those things are top of mind and top on the list of what we're going to do. But I think we're starting to see some of the models of the ways that we can invest, and it'll actually pay off in return for us.

Speaker Change: Repairing the brand or what we're doing with the brand or how the health of the brand is right now all of those things are top of mind and top on the list of what we're going to do but I think we're starting to see some of the models of the ways that we can invest and it'll actually pay off a return for us and so we'll be applying that again, we don't have all the facts, but we like something.

David Bergman: Sure, Paul, when you think about kind of front half versus back half, a couple of things come into play there. You know, first of all, when you think about Q1 and that overdrive and then, you know, what does that mean for the full year? Again, keep in mind that, you know, in the back half, we are expecting a little bit more developing APAC revenue pressure. We're also expecting a little bit higher ocean freight cost than we originally planned.

Kevin Plank: And so we'll be applying that again. We don't have all the facts, but we like some of the indications that we're seeing right now, and we sure like driving a more full price business and that 47.5 gross margin or something, which is a pretty good indicator for the health of how we're doing. Thank you, Kevin.

Speaker Change: Indications that we're seeing right now and when we show like driving a more full price business in that 47, five gross margin or something which has been a pretty good indicator for the health of how we're doing.

Laurent Falasucci: Yeah, in fact, yeah, the gross margin, nice, nice gross margin beat in the first quarter. Dave, I think you mentioned there were three factors that are incremental to the headwinds for the full year. I think you mentioned, you know, Ocean Freight FX and mix from licensed business.

Speaker Change: Thank you Kevin Yeah in fact, the gross margin nice gross margin beat on the first quarter.

David Bergman: Maybe could you, for the audience, could you kind of bridge it for us, how much those were in terms of incremental headwinds versus 90 days ago, as we think about the full year guide on gross margin? Yeah, I mean, I think, you know, what I was trying to elaborate on are the main year-over-year drivers that are, you know, behind our full-year improvement, still heavily weighted to favorable pricing with less DTT discounting and also supply chain benefits related to improved product costing.

Speaker Change: Dave I think you mentioned there were three factors.

David Bergman: There's also been some increasing FX pressure. And, you know, there's a little bit of caution that we have as well, just when you think about kind of the recent economic trends. But in general, from an operating income perspective, historically, we've definitely run higher amounts in the first half of the year and a little bit lower in the back half of the year. Some of that, if you think about Q2, that's historically a high revenue dollar quarter for us.

Speaker Change: There are incremental headwinds for the full year I think you've mentioned ocean freight FX and mix from license business, maybe for the audience can you kind of bridge that for us.

Speaker Change: Those were in terms of incremental headwinds versus 90 days ago, as we think about the full year guide on the gross margin.

Speaker Change: Yeah.

Speaker Change: Yes, I mean, I think you know what I was trying to elaborate on as the main year over year drivers that are behind our full year improvement still are heavily weighted to the favorable pricing with less DTC discounting and also the supply chain benefits related to the improved product costing those are the two.

David Bergman: And it's also generally a higher gross margin percentage quarter for us. So driving bigger, gross margin dollars in Q2 is kind of a historical trend for us. And then that higher front half profitability is also kind of amplified this year by the planned insurance recovery relative to the legal invoices paid prior to this year that I mentioned. And also shifting some of our planned marketing spend out to Q3 and Q4. And, you know, maybe the last thing I've mentioned there is, you know, back half forecast also carries more incentive compensation compared to the prior year back half where we were adjusting down, unfortunately, and reversing some of that incentive compensation that was recorded in earlier quarters last year.

David Bergman: Those are the two real big positives for the full year, and obviously, we saw a little bit of extra benefit there as we went through Q1. But as we look forward, the impact on freight costs is probably the largest kind of newer developing headwind that's kind of taking away some of that Q1 overdrive.

Speaker Change: Two real big positives on the full year and.

Speaker Change: Obviously, we saw a little bit of extra benefit there as we went through Q1, but as we look forward the impact on freight cost is probably the largest kind of newer developing headwind thats kind of taking away some of that Q1 overdrive.

Laurent Falasucci: And then a close second to that would be the foreign currency headwinds that have been developing that we saw during the first three months and that are projected a little bit forward. The change in mix due to licensing sales and some of the challenge margins on the off-price channel is a little bit of a smaller developing headwind, but the first two around freight costs and FX are a little bit bigger.

Speaker Change: And then a close second to that would be the foreign currency headwinds that had been developing that.

David Bergman: So when you add all those factors together, you know, it points to the front half being, you know, a substantial portion of our full year operating income, which is how we have things laid out in the plan.

Speaker Change: That we saw during the first three months and that our projected a little bit forward.

Speaker Change: The change in mix due to licensing sales and some of the challenged margins on the off price channel, that's a little bit of a smaller <unk>.

David Bergman: Now, on your second question relative to factory house, I would say that we did step into testing some lower promotion levels and less promotion levels, and we actually hadn't really planned on doing that, but as we stepped into that more deeply in e-commerce and we were excited about the results there on e-commerce, we decided to start testing that a little bit on factory house. And I would say that it was both the price level, the depth of the discount, and the results were really kind of mixed, to be honest, you know, we're experimenting, we're learning, we're seeking balance, you know, we did give up a little bit of revenue when we were doing that, and so we're continuing to kind of test and learn on the factory outside, but right now, I would say that the results from that are mixed and we've got some more work to do. Thank you, good luck. Thanks, Paul.

Speaker Change: Developing headwind the first two around freight costs and FX are a little bit bigger.

Speaker Change: Okay. Thank you congrats again on the beat and good luck with back to school.

Sam Poser: Thank you. Congratulations again on the beat, and good luck with that. Thank you. Our next question will come from Sam Poser with Williams Trading. You may now go ahead.

Speaker Change: Thank you thanks.

Speaker Change: Our next question will come from Sam Poser with Williams trading you May now go ahead.

David Bergman: Many of my questions have been answered. Thank you guys for taking the time to answer my questions. I was wondering, just a follow-up on the back half guidance. When you said that there was a shift out of marketing spend out of Q2, are we going to see, is that going to go more into Q4 because as sort of the beginning of this setup for where you're anticipating improvements into fiscal 26? Well, actually, some of Q1's bottom line overdrive was, you know, shifting some of that marketing spend to Q3 and Q4, and then similar with Q2 as well.

Sam Poser: Many of my questions have been answered. Thank you guys for taking my question.

Sam Poser: I was wondering just to follow up on the back half guidance.

Speaker Change: When you shoot you said that there is a shift out of marketing spend out of out of Q2.

Speaker Change: We're going to see is that going to go more into Q4, because as sort of the beginning of this setup for where youre anticipating improvements into fiscal 'twenty six.

Speaker Change: Well actually so some of Q1's Bottomline overdrive was.

Laura: Our next question will come from Laura, follow Sukey with the PMB to read about us. You may now go ahead.

Speaker Change: Shifting some of that marketing spend to Q3 and Q4 and then similar with Q2 as well. So we are back loading a little bit more in the back half on marketing than we originally anticipated in our outlook, but it's not all relative to Q4 I mean, some of it is laying into.

David Bergman: That was good morning. Thanks very much for taking me my question. Dave, I wanted to ask for the guidance, should we still assume wholesale is down, low double digits, and DTC down 10% for the year, and then with e-commerce down 25%, is that the right way to think about it going forward, and is there any lessons learned that you think you can apply to the rest of the business from the pullback and promotions in e-commerce?

David Bergman: So we are backloading a little bit more in the back half on marketing than we originally anticipated in our outlook, but it's not all relative to Q4. I mean, some of it is laying into the brand for going into fiscal 26 and beyond, but also making sure that we're really supporting the back to school and also the holiday sales that are in the holiday sales, mainly that are in Q3 for us or calendar Q4. Thank you.

Speaker Change: The brand for going into fiscal 'twenty, six and beyond but also making sure that were really supporting.

Sam Poser: The back to school and also the holiday sales that are in the holiday sales mainly that are in.

Sam Poser: Q3 for us or calendar Q4.

David Bergman: Sure, yeah, I would say that on full year, you know, we still are looking at wholesale down, kind of a low double digit percentage, kind of in that 10-12% range, and then DTC being down approximately 10% or so, and that is mainly driven by our decisions to kind of reset the brand, especially in North America, with the e-commerce pullback on promotions, and also, you know, an elevated product assortment there. Related to e-commerce specific, we're not necessarily giving guidance on that, but you would definitely see that being the over indexed decrease within the DTC being down 10%.

Sam Poser: And then secondly, secondly, Kevin, in what you were saying, there sort of is a combination of... You mentioned having patience and wanting to do things quickly. And I guess the question is, what is the sort of game plan look for for turning around to get North America sort of on the track you want it to? you know, how are you balancing patient, brand, speed, all of that as we look forward? I turned 52 on Tuesday, Sam.

Speaker Change: Thank you and then second.

Sam Poser: Secondly.

Sam Poser: Who.

Sam Poser: Kevin and what you were saying there, they're sort of they're sort of as a combination of.

Speaker Change: You had you mentioned, having patients and having and wanting to do things quickly.

Sam Poser: And I guess two questions.

Speaker Change: What is the sort of game plan look for turning around and getting North America sort of on the track you want to and you know how are you balancing.

Speaker Change: <unk> patients.

David Bergman: So definitely down more than 10%, maybe not the full 25 that we saw on Q1 when you think about full year, but again, that is intentional. Most of that is intentional, as we continue to drive through those promotional decisions within North America. Hey, Laurence, maybe I can just, let me pile on that too, because I think it's really instructive of what happened and what we're able to do through the lens of our full price e-commerce website that frankly had been quite as full price a year ago.

Speaker Change: Brand speed all of that as you.

Sam Poser: As we look forward.

Kevin Plank: I've actually been growing and maturing, I guess, you know. I thank you for the happy birthday. I've been. You know, as an entrepreneur, you always feel late. You feel like it's got to be done, you know, tomorrow, and that's something which has been somewhat of a strength. And at times, it can be difficult, especially as you get large and need to scale as an organization. But I think really coming into our own as a business, you know, we were opening this new headquarters, which is beautiful here in Baltimore.

Sam Poser: I turned 52 on Tuesday, Sam.

Sam Poser: <unk> been growing and maturing I guess.

Sam Poser: Thank you for the happy birthday, I've I've I've been.

Sam Poser: You know as an entrepreneur you always feel late you feel like it's got to be done tomorrow, and that's something which has been somewhat of a strength and at times. It can be difficult, especially as you get larger need to scale as an organization, but I.

Kevin Plank: And I don't know if that's exactly where shareholders would have liked us to spend money, but this thing is built, and it's going to be an incredible edifice for us that, today, we think is going to be a massive asset for the business. So I think really it's the maturity of just recognizing the hand that we have. And, you know, I've used this analogy of I've had a pair of twos, and we've had a royal flush before. And today, we have neither, but we've been able to win with both.

Sam Poser: I think really coming into our own as a business. We're opening this new headquarters, which is beautiful here in Baltimore, but I don't know if that's exactly where shareholders would have liked to have some spend money, but this thing is built and it's going to be an incredible edifice for us that today, we think it's going to be a massive asset for the business. So I think really it's the maturity of just recognizing the hand that we have in.

David Bergman: We were about 65% of what we were selling a year ago was promotional and about 35% full price, and with what we did by reducing, significantly reducing promotion days, we didn't quite invert it, but we made significant progress in terms of getting to full price sales. And so what that did as well is not only did it help us with you saw some of the gross margin flow through for ourselves, but it also helps the algorithms on our partner websites on the Amazon algorithm that goes around.

Sam Poser: I've used this analogy of I've had a pair twos and we've had a royal flush before and today, we have neither but we've been able to win with both so I feel pretty good about the hand that we have and just looking at the assets and you know ive sort of said.

Kevin Plank: So I feel pretty good about the hand that we have and just looking at the assets. And, you know, I've sort of said, you know, we've got 100 things to fix at UA. And, you know, of those 100 things, I'd say probably 70, 75 percent of them are self-inflicted.

David Bergman: And so you just watched a general rising tide raise all boats here. So as that's occurring, it's something that's pretty instructive as we're thinking about, we keep talking about repairing the brand or what we're doing with the brand or how the healthy the brand is right now. All those things are top of mind and top on the list of what we're going to do, but I think we're starting to see some of the models of the ways that we can invest and it'll actually pay off and return for us.

Speaker Change: We've got 100 things to fix it UA and of those 100 things I'd say, probably 70% to 75% of them are self inflicted the good news about that is that we can we can identify them. We can we can tweak them, we can make them better and the other great things is that while we would have 100 things to fix we also have a thousand things going for us.

Kevin Plank: And the good news about that is that we can identify them. We can tweak them. We can make them better. And the other great thing is that while we'd have 100 things to fix, we also have 1,000 things going for us. You know, when I think about just the sports marketing aspect of, you know, I'm not going to let Dave hear this, but I think with, you know, Notre Dame and IMG, there's probably enough just to build a sports brand with the credibility of, you know, one of the best high schools and not the best high school and one of the best colleges, not the best college, you know, in the country. And so that's very But it's going to come in time.

Sam Poser: When I think about just the sports marketing aspect of.

David Bergman: And so we'll be applying that. Again, we don't have all the facts, but we like some of the indications that we're seeing right now. We share like driving a more full price business and that 47 five gross margin is something which is be a pretty good indicator for the health of how we're doing.

Sam Poser: Now I'm not going to let Dave here, this but I think with Notre Dame and IMG.

Speaker Change: That's probably enough just to build a sports brand with the credibility of you know one of the best high schools and it's not the best High School and one of the best colleges not the best College.

Speaker Change: And the country and so that's that's very sort of regional in terms of how to think about it in North America, but it.

David Bergman: Thank you, Kevin. Yeah, in fact, yeah, the gross margin, nice gross margin beat on the first quarter. Dave, I think you mentioned there were three factors that are incremental to the headwinds for the full year. I think you mentioned, you know, ocean freight effects and mix from license business. Maybe could you for the audience, could you kind of bridge it for us? How much those were in terms of incremental headwinds versus 90 days ago as we think about the full year guy on the gross margin?

Sam Poser: It's going to come in time, we have the <unk>.

Kevin Plank: You know, we've got half a billion dollars to spend on marketing. But it doesn't feel like we're spending it. I want that impact to be there. You know, we've got an incredible platform that we have with performance and technique and design and style, and we just haven't played our best game there yet. So I'm really excited about this next chapter of maybe applying the lessons that have been learned over the years as I talk about how we're thinking about Europe, looking at what's happened in the U.S., and how we can sort of maybe make better decisions and choices there. But we've got a great hand to play.

Sam Poser: We've got half a billion dollars to spend in marketing it doesn't feel like we're spending it I want that impact would be there. We've got an incredible I think just platform that we have with performance and technical and design and style and we just haven't played our best game there yet so I'm really excited about this next chapter of maybe applying.

Speaker Change: The lessons that have been learned over the years they talked about what we're thinking about Europe.

David Bergman: Yeah, I mean, I think, you know, what I was trying to elaborate on is the main year of year drivers that are, you know, behind our full year improvement, still are heavily weighted to the favorable pricing with less DTT discounting. And also the supply chain benefits related to the improved product costing, those are the two real big positives on the full year. And, you know, obviously we saw a little bit of extra benefit there as we went through Q1, but as we look forward, the impact on freight costs is probably the largest kind of newer developing headwind that's kind of taking away some of that Q1 overdrive.

Sam Poser: Looking at what's happened in the U S and how we can sort of maybe make better decisions and choices there but.

Sam Poser: We've got a great hand to play I think we're putting in a plus team together.

Kevin Plank: I think we're putting an A-plus team together. It's super exciting to have a dude, and I say that like a dude, like Eric, coming on board to join our team because we've got some really good UA experts, industry experts that are surrounding this table and just put us in a position to, you know, we can't guarantee anything, but I like our chances and I'll play this hand every day. If I can just follow up real quick,

Eric Litkey: It's super exciting of having a dude and I say that like a do like Eric.

Sam Poser: Coming onboard to join our team because we've got some really good UA experts industry experts that are surrounding this table and just put us in a position to.

David Bergman: And then a close second to that would be, you know, the foreign currency headwinds that have been developing that we saw during the first three months and that are projected a little bit forward. The change in mix due to licensing sales and some of the challenge margins on the off price channel, that's a little bit of a smaller developing headwind, the first two around freight costs and effects are a little bit bigger.

Sam Poser: We can't guarantee anything but.

Sam Poser: Like our chances and I'll play the sand every day.

Sam Poser: I mean, I'm really talking about timing and, and, and, and, and, are you thinking of building this out in like getting North America turned around? Is it going to take, you know, 18 months, and you're going to do it sort of slow and steady? Or, or is this, you know, what sort of timeframe do you have with your own definition of getting? I think after the last call we sort of pinned people to fall 25 and so we sort of gave ourselves this 18 month outlook, but to be honest, I don't know if there's a definition where you say we're done.

Speaker Change: If I can just follow up real quick I mean, I'm really talking about timing and.

Sam Poser: Like are you thinking of building this out in getting the North America turned around is it going to take.

David Bergman: Okay, thank you.

Sam Poser: 18 months, and Youre going to do it sort of slow and steady or or is this what sort of what what kind of timeframe do you have in your own definition of getting.

Sam Poser: North America on the right track I mean, how are you thinking about that.

Speaker Change: 12 months thing or 18 months, saying, that's what I'm trying to get them out.

Speaker Change: I think after the last call, we sort of pin people to fall 25, and so we sort of gave ourselves. This 18 month outlook, but to be honest, we're not I don't know if there's I know, there's a definition where you say we've done. We're done. This is just going to be a constant iteration in work in progress and so.

David Bergman: Congrats again on the beat and good luck with back to school. Thank you. Thanks.

Sam Poser: Our next question will come from Sam Pozer with Williams treating. You may now go ahead. Well, many of my questions have been answered. Thank you guys for taking my question. I was wondering just a follow-up on the back cap guidance. When you're shit, you said that there's a shift out of marketing spend out of out of Q2. Are we going to see, is that going to go more into Q4 because as sort of the beginning of this setup for where you're anticipating improvements into fiscal 26?

Sam Poser: This is just going to be a constant iteration and work in progress, and so I think you'll start seeing it, and again, we're not sitting on our hands until fall 25. We've got some great products in the marketplace right now. There are incredible things we have with our Meridian platform, our Unstoppable platform that our team has been on for a while, and so our base layer platform. There are just some easy things that we can do to make sure that we're getting full credit.

Sam Poser: So I think youll start seeing and again, we're not sitting on our hands until fall 25, we've got some great product in the marketplace right now.

Sam Poser: Incredible things, we have we have with our meridian platform.

Sam Poser: Unstoppable platform that our team has been on for a while and so our base layer platform. There's just some easy things that we can do to.

Sam Poser: To make sure that were getting full credit is that I don't think that people see us as a you know.

Kevin Plank: I don't think that people see us as a, unless you did grow up 15 or 20 years ago, I'm not sure if you see compression as being Under Armour's founding product, and so we need to make sure that we give it the respect to tell the story of the products that we're building. So I'm really confident and excited about how that, you know, I can't emphasize enough how an organization that just needs to be focused on product, story, and region makes sure those three aspects are coming together quickly. So yeah, I don't know if it's going to be long, but you're going to see constant progress.

Sam Poser: Unless you did grow up 15, or 20 years ago I'm not sure if or if you see compression as being under Armours founding product and so we need to make sure that we're giving the respect tell the story of the products that we're building.

Sam Poser: Well, actually, so some of Q1's bottom line overdrive was shifting some of that marketing spend to Q3 and Q4 and then similar with Q2 as well. So we are back loading a little bit more in the back half on marketing than we originally anticipated in our outlook, but it's not all relative to Q4. I mean, some of it is laying into the brand for going into fiscal 26 and beyond, but also making sure that we're really supporting the back to school and also the holiday sales that are in Q3 for us or calendar Q4.

Sam Poser: I'm really confident and excited about how that I can't emphasize enough of where an organization that just needs to be focused on product story region mixture of those three aspects are coming together.

Sam Poser: Quickly so.

Speaker Change: Yeah, I don't know, if it's long, but youre going to see constant progress I think you'll see things like Wow that was a really great spot from the way that was a really cool product. There are some things that you can get behind and then you'll watch us begin to do the SKU reduction distort towards the products that are working and it doesn't just mean it will be best level products, but that's that characteristic I've said is that we don't have to abandon some of them.

Kevin Plank: I think you'll see things like, wow, that was a really great spot from UA, that was a really cool product. You know, there's some things that you can get behind and then you'll watch us begin to, you know, do the skew reduction, distort for the products that are working and it doesn't just mean it'll be best level products but, you know, that's that characteristic I said is that we don't have to abandon, you know, some of the current consumers we have in order to just start making more, you know, better and best level premium products.

Speaker Change: Our current consumers, we have in order to start making more.

Sam Poser: Better and best level premium product.

Kevin Plank: And I think, Sam, even though we're not ready to talk about fiscal 26 or 27 revenues for North America, one thing you can be assured of is that we're going to keep driving forward on being a healthier business in North America, and I think that's really what we're excited about right now, and we'll talk more about the future on future calls. Thank you very much.

Speaker Change: And I think Sam you know, even though we're not ready to talk about fiscal 'twenty six or 27 revenues for North America. One thing you can be assured of is that we're going to keep driving forward on being a healthier business in North America and I think that's that's really what we're excited about right now and we'll talk more about the future in coming calls.

Sam Poser: Thank you. And then secondly, the... Kevin, and what you were saying, there sort of.., there sort of is a combination of... You mentioned having patience and wanting to do things quickly, and I guess the question is, what is the sort of game plan look for turning around to getting North America sort of on the track you want to, and how are you balancing patience, brand speed, all of that as we look forward?

Sam Poser: Alright, Thank you very much.

Operator: Thank you, Sam. This concludes our question and answer session, as well as the conference. Thank you for attending today's presentation. You may now disconnect. SUPPORTER-MEMBERS HAVE MORE FLAMENGO SUPPORTER-MEMBERS HAVE MORE FLAMENGO SUPPORTER-MEMBERS HAVE MORE FLAMENGO SUPPORTER-MEMBERS HAVE MORE FLAMENGO SUPPORTER-MEMBERS HAVE MORE FLAMENGO SUPPORTER-MEMBERS HAVE MORE FLAMENGO, [music] [inaudible] David Bergman, David Bergman, David Bergman, David Bergman [music].

Sam Poser: Thank you Sam.

Speaker Change: This concludes our question and answer session as well as the conference.

Speaker Change: In today's presentation you may now disconnect.

Sam Poser: I turn 52 on Tuesday, Sam. I've actually been growing in mature, I guess. Thank you for the happy birthday. As an entrepreneur, you always feel late. You feel like it's got to be done tomorrow, and that's something which has been somewhat of a strength in a time that can be difficult, especially as you get large and need to scale as an organization. But I think really coming into our own as a business, we were opening this new headquarters, which is beautiful.

Sam Poser: Here in Baltimore, and I don't know if that's exactly where shareholders would have liked us to spend money, but this thing is built, and it's going to be an incredible edifice for us that today we think it's going to be a massive asset for the business. So I think really it's matured of just recognizing the hand that we have, and I've used this analogy, I've had a pair of twos and we've had a royal flush before, and today we have neither, but we've been able to win with both.

Sam Poser: So I feel pretty good about the hand that we have, and just looking at the assets, and I've sort of said, we've got 100 things to fix at UA, and of those 100 things, I'd say probably 75% of them are self-inflicted. The good news about that is that we can identify them, we can tweak them, we can make them better. And the other great thing is that while we have 100 things to fix, we also have 1,000 things going for us.

Sam Poser: When I think about just the sports marketing aspect of, I'm not going to let Dave hear this, but I think with Notre Dame and IMG, this is probably enough just to build a sports brand with the credibility of one of the best high schools and not the best high school and one of the best colleges, not the best college in the country. And so that's very sort of regional in terms of how I think about it in North America, but it's going to come in time.

Sam Poser: We've got half a billion dollars to spend in marketing, it doesn't feel like we're spending it, I want that impact to be there. We've got an incredible, I think, just platform that we have with performance and technical and design and style, and we just haven't played our best game there yet. So I'm really excited about this next chapter of maybe applying the lessons that have been learned over the years, they talked about, we're thinking about Europe and looking at what's happened in the US and how we can sort of maybe make better decisions and choices there, but we've got a great hand to play.

Sam Poser: I think we're putting an A plus team together, it's super exciting of having a dude, and I say that like a dude, like Eric, coming on board to join our team, because we've got some really good UA experts, industry experts that are surrounding this table and just put us in a position to, you know, we can't guarantee anything, but I like our chances and I'll play this hand every day. If I can just follow up real quick, I mean, I'm really talking about timing, and like, are you thinking of building this out and getting the North America turned around, is it going to take 18 months and you're going to do it sort of slow and steady, or what kind of timeframe do you have in your own definition of getting?

Sam Poser: and North America on the right track. I mean, how are you thinking about that? It is a 12-month thing or 18-month thing. That's what I'm trying to give you. Yeah, I think after the last call, we sort of pin people to fall 25, and so we sort of gave ourselves this 18-month outlook. But to be honest, I don't know if there's, I don't know if there's a definition where you say we've done, we're done.

Sam Poser: This is just going to be a constant iteration and work in progress. And you know, so I think you'll start seeing and again, we're not sitting on our hands until fall 25. We've got some great product in the marketplace right now. You know, there's incredible things we have, we have with, you know, our Meridian platform, you know, unstoppable platform that our team has been on for a while. And so, you know, our base layer platform, there's just some easy things that we can do to make sure that we're getting, you know, full credit is that I don't think that people see us as a, you know, unless you did grow up 15 or 20 years ago, I'm not sure if you, you know, see compression as being, you know, an enormous founding product.

Sam Poser: And so we need to make sure that we're giving a respect, tell the story of the products that we're building. So I'm really confident and excited about how that, you know, I can't emphasize enough of where an organization that just needs to be focused on product story region, make sure those three aspects are coming together quickly. So, yeah, I don't know if it's, it's long, but you're going to see constant progress.

Sam Poser: So I think you'll see things like, wow, that was a really great spot from UA, that was a really cool product. You know, there's some things that you can get behind. And then you'll watch us begin to, you know, do the skewer reduction. The story, you know, there's some things that you can get behind. And then you'll watch us begin to, you know, do the skewer reduction. The story, you know, the work for the products that are working, and it doesn't just mean it'll be best level products, but you know, that's that characteristic I said is that we don't have to abandon, you know, some of the current consumers we have in order to just start making more, you know, better and best level premium product.

Sam Poser: And I think Sam, you know, even though we're not ready to talk about, you know, fiscal 26 or 27 revenues for North America, one thing you can be assured of is that we're going to keep driving forward on being a healthier business in North America. And I think that's, that's really what we're excited about right now.

Kevin Plank: And we'll talk more about the future and coming calls.

Sam Poser: [music].

Operator: ..... music playing Music playing, Good morning, and welcome to the Under Armour First Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode.

Sam Poser: [music].

Sam Poser: [music].

Operator: Should you need assistance, please signal conference specialists by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your telephone keypad.

Speaker Change: Good morning, and welcome to the under armour first quarter 2025 earnings conference call all.

Speaker Change: All participants will be in listen only mode.

Speaker Change: Should you need assistance. Please signal conference vessels My question the Star key followed by zero.

Speaker Change: After todays presentation, there will be an opportunity to ask questions.

Speaker Change: That's a question you May press Star then one on your telephone keypad.

Operator: If you'd like to withdraw your question, please press stars 1 and 2. Please note this event is being recorded. I would now like to turn the conference over to Lance Allega, SVP, Investor Relations, Treasury, and Corporate Development. Please go ahead.

Speaker Change: To destroy a question. Please press Star then two.

Sam Poser: Please note this event is being recorded.

Sharlene Leurig: I would now like to turn the call shorter land illegal SVP Investor Relations Treasury and corporate development. Please go ahead.

Lance Allega: Good morning, and welcome to Under Armour's first quarter fiscal 2025 earnings conference call. This event is being recorded for replay. Joining us on today's call are Under Armour President and CEO Kevin Plank and CFO Dave Bergman. Our remarks today will include certain forward-looking statements that reflect Under Armour management's current view of our business as of August 8, 2024. These statements may include projections for our business in the present and future quarters and fiscal years. However, forward-looking statements are not guarantees of future business performance, and our actual results may differ materially from those expressed or implied in the views provided.

Speaker Change: Good morning, and welcome to under Armours first quarter fiscal 2025 earnings Conference call. Today's event is being recorded for replay.

Speaker Change: Joining us on today's call are under armour, President and CEO, Kevin Plank and CFO, Dave Bergman. Our remarks today will include certain forward looking statements that reflect the under armour is management's current view of our business as of August eight 2024. These statements may include projections for our business in the present and future quarters and fiscal years forward looking statements are not guarantees of future business performance.

Sam Poser: Actual results may differ materially from those expressed or implied in abuse provided.

Lance Allega: Statements made are subject to risks and other uncertainties detailed in this morning's press release and documents filed regularly with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. Today's discussion may also include non-GAAP references. Under Armour believes these measures give investors a helpful perspective on underlying business trends. When applicable, these measures are reconciled to the most comparable U.S. gap measures.

Sam Poser: Statements made are subject to risks and other uncertainties detailed this morning's press release and documents filed regularly with the SEC, including our annual report on Form 10-K, and our quarterly reports on Form 10-Q.

Sam Poser: Today's discussion May also include non-GAAP references and RARA believes these measures give investors a helpful perspective on underlying business trends when applicable. These measures are reconciled to the most comparable U S. GAAP measures reconciliations along with other information can be found this morning's press release and at about Dod under armour Dot com with that I'll turn the call over to Ken.

Lance Allega: Reconciliations, along with other pertinent information, can be found in this morning's fresh release and at about.underarmour.com. With that, I'll turn the call over to Kevin. Thank you, Lance, and good morning, everyone, for joining us on today's call. With the first quarter of Fiscal 25 behind us, I'm pleased that we started the year ahead of expectations, and I'm encouraged by the early progress we're making in executing our Protective South strategy. At the center of this strategy, we've recently declared to our team and partners that Under Armour is a sports house, a term that we're using to define the landscape in which we compete. The sports industry's version of the only handful of brands from Europe who've earned the right to refer to themselves as fashionists.

Sam Poser: Lynn.

Ken Lynn: Thank you Lance and good morning, everyone for joining us on today's call.

Ken Lynn: With the first quarter of fiscal 'twenty five behind Us I am pleased that we started the year ahead of expectations and I'm encouraged by the early progress we're making in executing our protect this house strategy.

Sam Poser: At the center of this strategy, we recently declared to our team and partners that under armour is a sports house.

Operator: Thank you very much. Thank you, Sam.

Sam Poser: It turns out we're using to define the landscape in which we compete.

Sam Poser: The sports industries version of the only handful of brands from Europe will earn the right to refer to themselves as fashion houses.

Kevin Plank: Across the sports brand landscape, we believe there are less than five brands that could be represented on this podium for sports globally, and that we are one of them. Earned over a 29-year history the credibility to show up in virtually any athletic endeavor on the field, pitch, or court, as an outfitter, and be seen by athletes in the more than 100 countries where we do business today, and we are generally famous as an authentic brand, an authentic sports house brand. This rare air amongst the landscape of the sports industry is an aspect of UA that we feel is incredibly unique. And just one of the attributes of strength we see for ourselves.

Sam Poser: Across the sports brand landscape. We believe there are lessons five brands that can be represented on this podium for sports globally.

Sam Poser: We are one of them.

Sam Poser: Earned over our 29 year history, the credibility to show up at virtually any athletic endeavor on the field pitch or court as an outfitter and be seen by athletes in the more than 100 countries, where we do business today and are generally famous as an authentic brand and authentic sports House brand.

Sam Poser: This rare air amongst the landscape of the sports industry is an aspect of the way that we feel is incredibly unique and just one of the attributes of strength, we see for ourselves we contemplate the opportunity that under armour has in front of us.

Kevin Plank: We contemplate the opportunity that Under Armour has in front of us. We believe this authenticity gives us an advantage as we reconstitute our brand strength and execute our strategy. To make that happen, this, of course, begins and ends with our culture, elevating its importance in visibility, raising the bar of our culture across the enterprise. And like our brand positioning work, we're also reconstituting this. Our culture is unique in how it describes our brand, the athletes we have, and the ones we plan to attract.

Sam Poser: We believe this authenticity gives us an advantage as we reconstitute our brand strength and execute our strategy.

Sam Poser: To make that happen. This of course begins and ends with our culture.

Sam Poser: Elevating its importance and visibility raising the bar of our culture across the enterprise and like our brand positioning work. We're also reconstituting this.

Sam Poser: Our culture is unique in how it describes our brand the athletes we have and the ones we plan to attract.

Kevin Plank: In this spirit, we've redefined who and what we stand for within our strategic plan. As discussed on our last call, the who we are is about athletes, sports, innovation, and passion. And we have a passion for, in its simplest definition, the underdog. The athlete who is not given all of God's gifts of talent and, despite what they're missing, is not tall or fast enough or strong or swift or clever enough.

Sam Poser: In this spirit, we've redefined who and what we stand for within our strategic plan.

Sam Poser: Discussed on our last call the who we are being about athletes sports innovation and passion.

Sam Poser: And we have a passion for and its simplest definition the underdog the athlete who has not given olive garden gifts of talent and despite what they're missing is.

Sam Poser: Tal or fast enough or strong or swift or clever enough for all those who have to stay laid after practice to work on a scale or steady harder than the rest of this is our underdog and.

Kevin Plank: For all those who have to stay late after practice to work on a skill or study harder than the rest, this is our underdog. And because of this, UA's athletes must use every resource and waking hour to make themselves better. We don't innovate as a brand for athletes so that they can run up a score. We expect every product we build to provide an edge for our athletes, just to give them a fighting chance to compete.

Sam Poser: And because of this.

Sam Poser: Always athletes must use every resource and waking hour to make themselves better said.

Sam Poser: Said differently we.

Speaker Change: We don't innovate as a brand for athletes so that they can run up the score. We expect every product we build to provide an edge for our athletes just to give them a fighting chance to compete.

Kevin Plank: This mentality is what drives our innovation agenda and manifests through grit, an oversized chip on the shoulder that is UA's beacon, an underdog spirit that can never be counted out. Each day, this UA team will operate with a responsibility to do everything in our power to push the boundaries of innovation that makes athletes perform better. And above all else, we recognize the privilege and joy it is to work in sport. Our aspired culture will be the outcome of bringing this to life.

Sam Poser: This mentality is what drives our innovation agenda and manifest through grit and oversized chip on the shoulder that is UAS beacon, an underdog spirit that can never be counted out.

Sam Poser: Each day. This UA team will operate with responsibility to do everything in our power to push the boundaries of innovation that makes athletes perform better.

Sam Poser: And above all else, we recognize the privilege and joy it is to work in sports.

Sam Poser: Our aspired culture will be the output of bringing this to life.

Kevin Plank: In this effort, we must become more deliberate in everything we do, recognizing the difference between experimentation and intentionality, and have the right talent and agile decision-making abilities to ensure we can do this consistently at a high level. As such, we've invested meaningfully in experienced leaders to supercharge our ability to execute differently than in years past. We're not just building a company; we're building a brand. And the reason is that a brand is so much more valuable than just a company.

Sam Poser: In this effort, we must become more deliberate in everything we do recognizing the difference between experimentation and intentionality and have the right talent and agile decision, making abilities to ensure we can do this consistently at a high level.

Sam Poser: As such we've invested meaningfully and experienced leaders to supercharge, our ability to execute differently than in years past.

Sam Poser: We're not just building a company we are building our brand and the reason is that our brand is so much more valuable than just a company.

Kevin Plank: We're building the UA brand with Purp. One iteration, one success, one day at a time. Looking back at the last four months, assuming the CEO chair, we still have much work to do, but I'm proud of what's been accomplished to date, including implementing a nine-month go-to-market process to complement our 18-month calendar, with a self-form uncrushable hat being our first delivered product now available and in stock online. We also began to work to reduce our SKU style count by 25%.

Sam Poser: We're building the UA brand with purpose.

Sam Poser: In iteration, one success one day at a time.

Sam Poser: Looking back at the last four months since assuming the CEO chair, we still have much work to do but I am proud of what's been accomplished to date.

Sam Poser: Including implementing a nine month go to market process to complement our 18 month calendar with a self format Crushable hat being our first delivered product now available and in stock online.

Sam Poser: We also began to work to reduce our skus style count by 25%.

Kevin Plank: Implementing a category management structure and right-sizing our organization with a head count reduction that, while painful, is now complete. However, we're still building, too. This brings me to the announcement we made a couple of days ago, the appointment of 30-year industry veteran Eric Liedtke as Under Armour's EVP of Brand Strategy.

Sam Poser: Implementing our category management structure and right sizing our organization with a head count reduction that while painful is now complete.

Sam Poser: However, we're still building too.

Speaker Change: This brings me to the announcement, we made a couple of days ago. The appointment of 30 year industry veteran Eric Litke as under Armours EVP of brand strategy.

Kevin Plank: Following a 26-year career at Adidas, culminating in his roles as brand president and executive board member, we're thrilled to welcome, Complimenting one of the strongest product teams we've had in nearly a decade, Eric's proven track record of transformational brand growth and strategy will be an incredible asset to our product and regional leaders and our broader executive leadership team at this crucial time. As EVP of Brand Strategy, Eric will oversee our brand marketing, corporate strategy, consumer insights, sports marketing, creative, and loyalty functions.

Speaker Change: Following a 26 year career at Adidas, culminating in his role as brand President and Executive Board member, we're thrilled to welcome him.

Operator: This concludes our question and answer session as well as the conference. Thank you for today's presentation. You may now disconnect. Thank you very much. Thank you. .

Operator: Paul Lejuez, David Bergman, Paul Lejuez, David Bergman, Paul Lejuez Paul Lejuez, Paul Lejuez, David Bergman, Paul Lejuez, David Bergman, Paul Lejuez, David Bergman, Paul Lejuez, Paul Lejuez, David Bergman, Paul Lejuez, David Bergman, Paul Lejuez,[inaudible] David Bergman, Paul Lejuez,[inaudible] Paul Lejuez, David Bergman, Paul Lejuez, Good morning and welcome to the Under Armour first quarter, 2025 earnings conference call. All participants will be in listen only mode. Should you use assistance, please say no conference specialist by question the start key followed by zero.

Speaker Change: Complementing one of the strongest product teams, we've had in nearly a decade Eric's proven track record of transformational brand growth and strategy will be an incredible asset to our product and regional leaders and our broader executive leadership team at this crucial time.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask the question, you may press star than one your telephone keypad. To this draw your question, please press star than two. Please note that this is being recorded.

Lance Allega: I would now like to turn the conference over to Lance Allega, SDP, Investor Relations, Treasury and Corporate Development. Please go ahead.

Speaker Change: As EVP of brand strategy, Eric will oversee our brand marketing corporate strategy consumer insights sports marketing creative and loyalty functions.

Kevin Plank: In addition, Eric will be tasked with building out our marketing organization, including its go-forward leadership that will report to him. On our last call, we outlined what needed to be done immediately, and distilled the key points of our strategy into a presentation that's now been delivered to all 16,000 UA teammates and taken on the road to our key retail partners, factories, and franchisees globally across North America, EMEA, and AIPAC. From quick hallway talks to two- to three-hour meetings and presentations, we had transparent two-way conversations to gain perspective about how to take better care of our brand.

Sam Poser: In addition, Eric will be tasked with building out our marketing organization, including its go forward leadership that will report to him.

Sam Poser: On our last call, we outlined what needs to be done immediately.

Speaker Change: There's still the key points of our strategy into a presentation. That's now been delivered to all 16000 teammates and take it on the road to our key retail partners factories franchisees globally across North America, EMEA and APAC.

Speaker Change: From quick hallway talks to two to three hour meetings and presentations. We are transparent two way conversations to gain perspective about how to take better care of our brand.

Lance Allega: Good morning and welcome to Under Armour's first quarter, fiscal 2025 earnings conference call. Today's event is being recorded for replay.

Kevin Plank: These interactions have provided well-rounded insights into our strengths and areas of opportunity, such as being faster and bringing products to market, more intentional and committed storytelling for our launch, serving as a better business partner, and driving deeper connections with athletes to ignite brand love. A constant theme across these exchanges, parallel to the spirit of many of our investor conversations, is the optimism in Under Armour's ability to deliver a premium positioning and unleash our full potential. In the product construct of good, better, and best, we believe that UA can do business in all three, including as it relates to price, a unique characteristic of being an authentic sports podium brand.

Speaker Change: These interactions to provide a well rounded insights into our strengths and areas of opportunity such as being faster in bringing products to market more intentional and committed storytelling for our launches serving as a better business partner and driving deeper connections with athletes to ignite brand love.

Lance Allega: Joining us on today's call are Under Armour President and CEO Kevin Plank and CSO Dave Bergman. Our remarks today will include certain forward-looking statements that reflect Under Armour's management's current view of our business as of August 8th, 2024. These statements may include projections for our business in the present and future quarters and fiscal years. Forward-looking statements are not guarantees a future business performance. Our actual results made different materially from those expressed or implied interviews provided.

Lance Allega: Statements made are subject to risks and other uncertainties detailed this morning's press release and documents filed regularly with the SEC, including our annual report in Form 10K and our quarterly reports on Form 10Q. Today's discussion may also include non-GAAP references. Under Armour believes these measures give investors a helpful perspective on underlying business trends. When applicable, these measures are reconciled to the most comparable US gap measures. Reconciliation along with other pertin information to be found this morning's press release and at about.underarmour.com.

Speaker Change: Constant theme across these exchanges parallel to the spirit of many of our Investor conversations is the optimism and under Armours ability to deliver a premium positioning and unleash our full potential.

Kevin Plank: With that, I'll turn the call over to Kevin.

Kevin Plank: Thank you, Lance, and good morning everyone for joining us on today's call. With the first quarter of fiscal 25 behind us, I'm pleased that we started the year ahead of expectations and I'm encouraged by the early progress we're making in executing our protective South strategy. At the center of this strategy, we've recently declared to our team and partners that under Armour is a sports house. A term that we're using to define the landscape in which we compete.

Speaker Change: In the product construct of good better and best we believe that UA can do business in all three including as it relates to price a unique characteristic of being an authentic sports podium brand <unk>.

Kevin Plank: The sports industries version of the only handful of brands from Europe who've earned the right to refer to themselves as fashion houses. Across the sports brand landscape, we believe there are less than five brands that could be represented on this podium for sports globally. And that we are one of them, earned over our 29 year history, the credibility to show up in virtually any athletic endeavor on the field, pitch or court as an outfitter and be seen by athletes in the more than 100 countries where we do business today and are generally famous as an authentic brand and authentic sports house brand.

Kevin Plank: This is probably the most significant business advantage of being a sports house and why we believe we can drive a more premium positioning while not abandoning the good level altogether. This range is one of the reasons I know we can attract A-plus talent to join us in this next chapter. And this potential is evident. When we combine innovative products, outstanding design, and thoughtful storytelling, we delight athletes with performance solutions they never knew they needed and now cannot imagine living without.

Speaker Change: It is probably the most significant business advantage of being a sports house and why we believe we can drive a more premium positioning while not abandoning good level altogether.

Speaker Change: This range is one of the reasons I know, we can attract a plus talent to join US in this next chapter.

Kevin Plank: This rare era amongst the landscape of the sports industries and aspect of UA that we feel is incredibly unique and just one of the attributes of strength we see for ourselves, we contemplate the opportunity that under Armour has in front of us. We believe this authenticity gives us an advantage as we reconstitute our brand strength and execute our strategy.

Speaker Change: And this potential is evident when we combine innovative products outstanding design and thoughtful storytelling, we delight athletes with performance solutions, they never knew they needed and now cannot imagine living without.

Kevin Plank: This, in conjunction with our strengthened product team and feedback based on early sharing of our evolving product line architecture, is encouraging. We aim to scale this more broadly across every product we make with renewed energy, story, clarity, and alignment across the company. With that in mind, I'll highlight each element of our Protect This House strategy, starting with building better products and storytelling. Central to the evolution of our product organization has been the re-architecture of leadership and structure over the past year, with Jacine Seide leading a talented and experienced team of apparel, footwear, innovation, and design experts. By order of operations, product was the most immediate fix and, frankly, the longest lead time UA needed to address.

Speaker Change: This in conjunction with our strength in product team and feedback based on early sharing of our evolving product line architecture is encouraging we.

Kevin Plank: To make that happen, this of course begins and ends with our culture, elevating its importance and visibility, raising the bar of our culture across the enterprise and like our brand positioning work, we're also reconstituting this. Our culture is unique in how it describes our brand, the athletes we have and the ones we plan to attract. In this spirit, we've redefined who and what we stand for within our strategic plan. As discussed in our last call, the who we are being about athletes, sports, innovation and passion.

Speaker Change: We aimed to scale this more broadly across every product, we make with renewed energy story clarity and alignment across the company.

Speaker Change: With that I'll highlight each element of our protect this house strategy start starting with building better products and storytelling.

Speaker Change: Central to the evolution of our product organization has been the re architecture of leadership and structure over the past year with.

Speaker Change: <unk> seen saidi, leading a talented and experienced team of apparel footwear innovation and design experts by order of operations product was the most immediate fix and frankly, the longest lead time UA needed to address I'm very confident the work. This team is executing including a more centralized vision across product merchandise and marketing.

Kevin Plank: We have a passion for, in its simplest definition, the underdog. The athlete who is not given all of God's gifts of talent, and despite what they're missing, is not tall or fast enough or strong or swift or clever enough. For all those who have to stay late after practice to work on a skill or study harder than the rest, this is our underdog. And because of this, UAS athletes must use every resource and waking hour to make themselves better.

Kevin Plank: I'm very confident in the work this team is executing, including a more centralized vision across product, merchandise, and marketing that will enable us to correct our past inconsistencies, always editing and innovating to drive our brand forward. With new leadership also came new priorities, and we're progressing well with our category portfolio realignment. This brings greater simplicity to the business and adds focus to our core sports categories, yielding much clearer roles and responsibilities for our product teams to identify and execute go-to-market plans that are ideally optimized for the highest quantitative and qualitative returns.

Speaker Change: That will enable us to correct, our path and consistency is always editing and innovating to drive our brand forward.

Speaker Change: With new leadership also came new priorities and we're progressing well with our category portfolio realignment.

Kevin Plank: Said differently, we don't innovate as a brand for athletes so that they can run up the score. We expect every product we build to provide an edge for our athletes, just to give them a fighting chance to compete. This mentality is what drives our innovation agenda and manifests through grit and oversized chip in the shoulder that is UAS beacon, an underdog spirit that can never be counted out. Each day this UAS team will operate with responsibility to do everything in our power to push the boundaries of innovation that makes athletes perform better. And above all else, we recognize the privilege and joy it is to work in sports.

Speaker Change: Brings greater simplicity to the business and its focus to our core sports categories, yielding much clear roles and responsibilities for our product teams to identify and execute go to market plans that are ideally optimized for the highest quantitative and qualitative returns.

Kevin Plank: As mentioned on our last call, our Fall-Winter 25 season is when this team's efforts will begin to show up more robustly with new design language and improved balance between performance and style. A pivotal season that we will build into subs Yet that doesn't mean we're just sitting back waiting for next year.

Speaker Change: As mentioned on our last call of our fall winter twenty-five season is when this team's efforts will begin to show up more robustly with new design language, an improved balance between performance and style our.

Speaker Change: Pivotal season that will build into subsequent ones.

Speaker Change: Yes that doesn't mean, we're just sitting back waiting for next year.

Kevin Plank: We're working to elevate our core men's apparel business with a refined assortment, infusing it with industry-leading performance technologies and a more deliberate design direction. At the same time, we're sequencing investments in our footwear and women's businesses to reinvigorate consideration among two of our largest long-term growth operators. We're also shifting towards a head-to-toe approach across our largest categories by employing key franchises, trend-right styles, and innovations to underscore an always-on authenticity. Looking at the season ahead, Fall-Winter 24, we're going to see an uptick in our sportswear offering with more occasions to wear them for the 16- to 24-year-old varsity team sport athlete who we target.

Speaker Change: We're working to elevate our core men's apparel business with a refined assortment infusing it with industry, leading performance technologies in a more deliberate design direction.

Kevin Plank: Our aspired culture will be the output of bringing this to life. In this effort, we must become more deliberate in everything we do, recognizing the difference between experimentation and intentionality, and have the right talent and agile decision-making abilities to ensure we can do this consistently at a high level. As such, we've invested meaningfully in experienced leaders to supercharge our ability to execute differently than in years past. We're not just building a company, we're building a brand.

Speaker Change: At the same time, we're sequencing investments in our footwear and women's businesses to reinvigorate consideration among two of our largest long term growth opportunities.

Speaker Change: We're also shifting towards a head to toe approach across our largest categories by employing pulling key franchises trend right styles and innovations to underscore an always on authenticity.

Kevin Plank: And the reason is that a brand is so much more valuable than just a company. We're building a UAS brand with purpose, one iteration, one success, one day at a time. Looking back in the last four months and assuming the CEO chair, we still have much work to do. But I'm proud of what's been accomplished to date, including implementing a nine-month go-to-market process to complement our 18-month calendar with a self-form and crushable hat being our first delivered product now available and in stock online. We also began the work to reduce our skew style count by 25% implementing a category management structure and right-starting our organization with a head count reduction that while painful is now complete.

Kevin Plank: However, we're still building too.

Speaker Change: Looking at the season ahead fall winter 24 were to see an uptick in our sportswear offering with more to and from wearing occasions for the 16 to 24 year old varsity team sport athlete, who we target.

Kevin Plank: This includes the launch of high-performance streetwear in Unstoppable, versatility style and athletic performance in Meridian, elevated warm-ups and sport-inspired looks in our Icon Fleece collection, Infinite and Phantom running launches, and finally, in basketball, the Curry 12, along with a first signature shoe for De'Aaron Fox of the Sacramento Kings. Our next most significant effort is driving an improved demand creation ecosystem through compelling storytelling and aligned We've begun to optimize our marketing organization, including efforts to clean up our messaging, particularly in North America. A great example is our use of performance marks. Last year, when we sent an email to consumers, two-thirds of these messages were about discounts or promotions, and one-third were focused on full-price selling and storytelling.

Speaker Change: This includes the launch of high performance Street wear and unstoppable versatile style enough balletic performance in meridian elevated warm ups and sport inspired looks in our icon fleece collection infinite and Phantom running launches and finally in basketball the Curry 12, along with our first signature shoe for Darren Fox of the Sacramento Kings.

Speaker Change: Our next most significant effort is driving improved demand creation ecosystem through compelling storytelling and aligned merchandising.

Speaker Change: We've begun to optimize our marketing organization, including efforts to clean up our messaging, particularly in North America.

Kevin Plank: This brings me to the announcement we made a couple of days ago. The appointment of 30-year industry veteran Eric Litke as unarmors EVP of brand strategy. Following a 26-year career at Adidas, culminating in his roles as brand president executive board member, we're thrilled to welcome him. Complimenting one of the strongest product teams we've had in nearly a decade, Eric's proven track record of transformational brand growth and strategy will be an incredible asset to our product and regional leaders and our broader executive leadership team at this crucial time.

Speaker Change: Great example is our use of performance marketing.

Kevin Plank: As EVP of brand strategy, Eric will oversee our brand marketing, corporate strategy, consumer insights, sports marketing, creative and loyalty functions. In addition, Eric will be tasked with building out our marketing organization, including its go-forward leadership that will report to him.

Speaker Change: Last year, when we send an email to consumers two thirds of these messages were about discounts or promotions and one third were focused on full price selling and storytelling.

Kevin Plank: This year, that ratio is now inverted, which, although early, is showing signs of positive traction and perception. So it's encouraging to imagine how a year's impact might improve our brand affinity, in addition to not simply leading on the retail floor or online with price. We will ensure that we are telling a story about the product advantage, with messaging focused on premium franchises and inspirational connections around key retail and sports moments. In North America, upcoming back-to-school activations highlight key franchises across team sports, apparel, footwear, and sportswear styles.

Speaker Change: This year that ratio is now inverted.

Speaker Change: Although early is showing signs of positive traction in perception.

Speaker Change: So it's encouraging to imagine how a year's impact might improve our brand affinity.

Speaker Change: In addition to not simply leading on the retail floor or online with price. We will ensure that we are telling a story about the product advantages with messaging focused on premium franchises and inspirational connections around key retail and sports moments.

Speaker Change: In North America upcoming back to school Activations highlight key franchises across team sports apparel footwear and sportswear styles.

Kevin Plank: On our last call, we outlined what needs to be done immediately. There's still the key points of our strategy into a presentation that's now been delivered to all 16,000 UA teammates and take it on the road to our key retail partners, factories, and franchises globally across North America, Amaya and APEC. From quick hallway talks to 2-3 hour meetings and presentations, we had transparent two-way conversations to gain perspective about how to take better care of our brand.

Kevin Plank: The Elite 24 Basketball Showcase this coming weekend in New York City and our All-America Volleyball and American Football events in Orlando in January give us an excellent platform to connect even more deeply with young team sport athletes. In Asia-Pacific, Stephen Curry will be taking his first tour across China since 2019 this September.

Speaker Change: The elite 24 basketball showcases this coming weekend in New York City.

Speaker Change: All America volleyball, and American football events in Orlando in January.

Speaker Change: Give us an excellent platform to connect even more deeply with young team sport athletes.

Speaker Change: In Asia Pacific Stephan Curry will be taking his first tour across China. Since 2019 This September and.

Kevin Plank: And we're generating brand heat through social media and activations, leading to millions of new followers and thousands of new member enrollments in just the first few days. With four major cities on tap, we look forward to September's tour and the energy it will bring to the Chinese market. In Europe, across EMEA, football has been a sharp point in driving brand affinity with youth and unlocking our sportswear consideration. Activations during critical sporting moments, including the English Premier League, the Champions League Final, and the Euro Championship, focused on our iconic Heat Gear compression apparel and the clone Magnetico boot featuring a young stable of UA athletes, including Tony Ruediger of Real Madrid and Eddie Enquetia of Arsenal. We are very much involved in this conversation in European football.

Speaker Change: And we're generating brand heat through social media and Activations, leading to millions of new followers and thousands of new member enrollments in just the first few days.

Kevin Plank: These interactions have provided well-rounded insights into our strengths and areas of opportunity, such as being faster and bring products to market, more intentional and committed storytelling for our launches, serving as a better business partner, and driving deeper connections with athletes to ignite brand love. Constant theme across these exchanges parallel to the spirit of many of our investor conversations is the optimism and under armors ability to deliver a premium positioning and a leash our full potential.

Speaker Change: With four major cities on tap, we look forward to September tour, and the energy will bring to the Chinese market.

Speaker Change: In Europe across EMEA.

Paul: Paul has been a sharp point in driving brand affinity with youth in unlocking our sportswear consideration activations during critical sports moments, including the English Premier League Champions League final and the Euro Championships focussed on our iconic <unk> compression apparel and the clone magnetic <unk> boot featuring a young stable of UA athletes, including Tony.

Kevin Plank: In the product construct of good, better and best, we believe that UA can do business in all three, including as it relates to price, a unique characteristic of being an authentic sports podium brand. This is probably the most significant business advantage of being a sports house, and while we believe we can drive a more premium positioning while not abandoning good level altogether. This range is one of the reasons I know we can attract a plus talent to join us in this next chapter.

Speaker Change: Ruediger of rail Madrid, Eddie and <unk> of Arsenal, we're very much in this conversation in European football.

Kevin Plank: We're also increasing our investment in paid social media influencers. Over the next few years, we intend to double the number of influencers in our creator program to lean into fresh, new content to drive reach and engagement. In line with this, we signed University of Miami Women's College basketball players Haley and Hannah Cavender to a multi-year partnership.

Speaker Change: We're also increasing our investment in paid social media Influencers over the next few years, we intend to double the number of Influencers and our creator program to lean into fresh new content to drive reach and engagement.

Kevin Plank: In this potential as evident, when we combine innovative products, outstanding design and thoughtful storytelling, we delight athletes for performance solutions they never knew they needed and now cannot imagine living without. This in conjunction with our strengthened product team and feedback based on early sharing of our evolving product line architecture is encouraging. We aim to scale this more broadly across every product we make with renewed energy, story, clarity, and alignment across the company.

Speaker Change: In line with this we signed Universal Miami Women's College basketball players Haley and handle calendar to a multi year partnership. This serves as a metaphor for tying together sport authenticity and influencer relevance with nearly 7 million followers across Instagram and Tic Toc, it's great to welcome them to the brand.

Kevin Plank: This serves as a metaphor for tying together sport authenticity and influencer relevance. With nearly 7 million followers across Instagram and TikTok, it's great to welcome them to the brand. Another first quarter highlight was demonstrating staying on our front foot with collegiate assets, including extending our partnership with the University of Maryland to be the exclusive outfitter of athletics programs, including 19 varsity sports and universities clubs in intramural sports. With now seven Power Four teams for UA, 85 Division I squads, and 350 Division II and Division III schools, our NCAA presence is a testament to Under Armour being a brand that athletes trust, a true sports

Speaker Change: Another first quarter highlight was demonstrating staying on our front foot with collegiate assets, including extending our partnership with the University of Maryland to be the exclusive outfitter of Athletics program, including 19 varsity sports and universities club in intramural sports.

Kevin Plank: With that, I highlight each element of our protective house strategy, starting with building better products and storytelling. Central to the evolution of our product organization has been the re-architecture of leadership and structure over the past year. With Dacincide leading a talented and experienced team of apparel, footwear, innovation, and design experts. By order of operations, product was the most immediate fix and frankly longest lead time UA needed to address. I'm very confident the work this team is executing, including a more centralized vision across product merchandise and marketing that will enable us to correct our past inconsistencies, always editing and innovating to drive our brand forward.

Speaker Change: With now seven power for teams for UA 85 Division, one squads and 350 division to individually III schools are NCWA presence is a testament to under armour being a brand that athletes trust a true sports house.

Kevin Plank: We also announced our new partnership with USA Football as the official and exclusive partner. This is also an excellent opportunity for us to have a front and center grassroots pathway to define flag football across more than a million member athletes by integrating it into our existing UA Next platform. We're very excited about this, especially as it leads to flag football's debut at the 2028 Summer Olympics in Los Angeles, where you will be the official outfitter for Team USA competing on the gridiron.

Speaker Change: We also announced a new partnership with USA football is the official and exclusive uniform apparel and footwear provider, including the U S men's and women's National teams. This is also an excellent opportunity to have a front and center grassroots pathway to defining flag football across more than 1 million member athletes by integrating it into our existing UA next platform.

Speaker Change: We're very excited about this especially as it leads to flag football his debut at the 2028 Summer Olympics in Los Angeles, where <unk> will be the official outfitter for team USA competing on the grid iron.

Kevin Plank: With new leadership also came new priorities, and we're progressing well with our category portfolio re-alignment. This brings greater simplicity to the business and adds focus to our core sports categories, yielding much clearer roles and responsibilities for our product teams to identify and execute go-to-market plans that are ideally optimized for the highest quantitative and qualitative returns. As mentioned on our last call, our fall winner 25 season is when this team's efforts will begin to show up more robustly with new design language and improved balance between performance and style.

Kevin Plank: And speaking of the Olympics, with more than 70 athletes from 26 countries across 28 sports representing UA, we've had a fantastic roster on the world's largest, most famous athletic stage. A few call-outs, of course, are Stephen Curry and Kelsey Plum on the U.S. men's and women's basketball teams, and New York City Marathon winner Sharon Locati, representing Kenya at her first Olympics.

Speaker Change: And speaking of the Olympics with more than 70 athletes from 26 countries across 28 sports representing UA, we've had a fantastic roster on the world's largest most famous athletic stage.

Speaker Change: Few callouts of course are Stephan Curry and Kelsey plumb on the U S men's and women's basketball teams, New York City Marathon Winter, Sharon locating representing Kenya at our first games and firm and Lopez of key Spanish player Who's led his team to the final the Olympic football tournament by scoring four goals and to assist in just five games.

Kevin Plank: And Thurman Lopez, a key Spanish player who's led his team to the final of the Olympic football tournament by scoring four goals and two assists in just five games. Next up is our second strategic priority, running smart plays and our work to optimize our business to clean up unnecessary complexity, meaning growth by constraint. Our approach here is simple: test all existing rules to determine how to take advantage of all business dimensions more efficiently.

Kevin Plank: A pivotal season that we will build into subsequent ones, yet that doesn't mean we're just sitting back waiting for next year. We're working to elevate our core men's apparel business with a refined assortment, infusing it with industry leading performance technologies in a more deliberate design direction. At the same time, we're sequencing investments in our footwear and women's businesses to reinvigorate consideration among two of our largest long-term growth opportunities. We're also shifting towards a head to toe approach across our largest categories by employing key franchises, trend right styles and innovations to underscore and always on authenticity.

Speaker Change: Next up is our second strategic priority running smart plays in our work to optimize our business to clean up unnecessary complexity.

Speaker Change: Meaning growth by constrained or.

Speaker Change: Our approach here is simple test all existing rules to determine how to take advantage of all business dimensions more efficiently accordingly, no areas left unturned and all systems structures and processes must have a clear and well defined purpose and output and definition of success.

Kevin Plank: Accordingly, no area is left unturned, and all systems, structures, and processes must have a clear and well-defined purpose and output and definition of success. Though a difficult decision, our restructuring program has given us a head start in streamlining the organization. During the quarter, we right-sized our workforce and are executing various transformational initiatives and advancing considerations around facilities, software, and other areas. As a result of some of this work, we've begun laying out projects to automate tasks in decision-making processes using both traditional and AI solutions to unlock data-driven insights and operational improvements.

Kevin Plank: Looking at the season ahead, fall winter 24, we're going to see an uptick in our sports we're offering with more to and from wearing occasions for the 16 to 24 year old varsity team sport athlete who we target. This includes the launch of high performance street wear and unstoppable. Versatile style and athletic performance and meridian, elevated warm ups and sport inspired looks in our icon police collection, infinite and phantom running launches. And finally, in basketball, the Curry 12 along with the first signature shoe for de Aaron Fox of the Sacramento Kings.

Speaker Change: So a difficult decision our restructuring program has given us a head start and streamlining the organization.

Speaker Change: During the quarter, we right sized our workforce and are executing various transformational initiatives and advancing considerations around facilities software and other areas.

Speaker Change: As a result of some of this work we've begun laying out projects to automate tasks and decision, making process using both traditional and AI solutions to unlock data driven insights and operational improvements.

Kevin Plank: So, very promising for long-term efficiency. However, this output of complexity has led to the creation of, frankly, too many products that, without proper segmentation and marketplace differentiation, have challenged brand affinity. In this respect, I've tasked our team with achieving a 25% SKU reduction over the next 18 months, and we're making solid progress toward this objective. This is not, however, a blanket strategy across our good, bad, or best contracts. Nor does it apply to all categories equally.

Speaker Change: <unk> very promising for long term efficiency gains.

Kevin Plank: Our next most significant effort is driving improved demand creation ecosystem through compelling storytelling and aligned merchandising. We've begun to optimize our marketing organization, including efforts to clean up our messaging, particularly in North America. Great example is our use of performance marketing. Last year, when we sent an email to consumers, two thirds of these messages were about discounts or promotions and one third were focused on full price selling and storytelling. This year, that ratio is now inverted, which although early is showing signs of positive traction and perception, so it's encouraging to imagine how a year's impact might improve our brand affinity.

Speaker Change: And output of complexity led to the creation of frankly, too many products that without proper segmentation and marketplace differentiation have challenged brand affinity in this respect I've tasked our team with achieving a 25% SKU reduction over the next 18 months and we're making solid progress towards this objective.

Speaker Change: This is not however, blanket strategy across our good better best construct nor does it apply to all categories equally we're being surgical and this effort distorting toward areas of opportunity with the highest returns both financially and strategically from a brand building perspective, and purposely over indexing towards better and best level products as we elevate.

Kevin Plank: We're being surgical in this effort, distorting toward areas of opportunity with the highest returns, both financially and strategically from a brand-building perspective and purposely over-indexing toward better and best-level products as we elevate our brand position. We're also working to become smarter and more efficient by modernizing our supply chain with two primary objectives. Improving our end-to-end planning and cross-channel capabilities, led by Chief Supply Chain Officer Sean Curran, our end-to-end planning work spans multiple disciplines, aiming to enhance our ability to plan better and protect our consumers' needs, to optimize our assortments and manage inventory across regions, channels, and retail doors.

Speaker Change: Our brand positioning.

Kevin Plank: In addition to not simply leading on the retail floor or online with price, we will ensure that we are telling a story about the product advantages with messaging focused on premium franchises and inspirational connections around key retail and sports moments. In North America, upcoming back to school activations, highlight key franchise across team sports, apparel, footwear and sportswear styles. The Elite 24 basketball showcase this coming weekend in New York City in our all America volleyball and American football events in Orlando in January.

Speaker Change: We're also working to become smarter more efficient by modernizing our supply chain with two primary objectives.

Sean Kern: Improving our end to end planning and cross channel capabilities led by Chief supply chain Officer, Sean Kern, our end to end planning work spans multiple disciplines aiming to enhance our ability to plan better and protect our consumers needs to optimize our assortments and manage inventory across regions channels and retail doors.

Kevin Plank: We've also started a multi-year distribution logistics modernization initiative to enable cross-channel capabilities to optimize cost, maximize speed, ensure inventory availability, and increase service levels across our DTC and wholesale business. Now, that takes us to our third priority.

Speaker Change: We've also started a multiyear distribution logistics modernization initiative to enable cross channel capabilities to optimize cost maximize speed ensure inventory availability and increased service levels across our DTC and wholesale businesses.

Kevin Plank: Give us an excellent platform to connect even more deeply with young team sport athletes. In Asia Pacific, Stephen Curry will be taking his first tour across China since 2019 this September. And we're generating brand heat through social media and activations leading to millions of new followers and thousands of new member enrollments in just the first few days. With four major cities on tap, we look forward to September's tour and the energy will bring to the Chinese market.

Sean Kern: That takes us to our third priority elevating consumer experiences, where we're focused on driving excellence across our direct to consumer and wholesale businesses.

Kevin Plank: Elevating Consumer Experiences, where we're focused on driving excellence across our direct consumer and wholesale business. In DTC, the first quarter marked the beginning of our journey to elevate our North American e-commerce business toward a more significant and premium consideration. As expected, our e-commerce revenue is down, driven by roughly a third fewer promotional days than last year. However, positively.

Sean Kern: DTC first quarter marked the beginning of our journey to elevate our North American e-commerce business toward a more significant and premium consideration.

Sean Kern: As expected our e-commerce revenue was down driven by roughly a third fewer promotional days than last year. However, positively the percentage of full price sales in our digital channel rose significantly along with a reduced mix of outlet and clearance sales. So all those still in the early days of this strategy were optimistic about initial performance metrics, which include.

Kevin Plank: In Europe across the mayor, football has been a sharp point in driving brand affinity with youth and unlocking our sportswear consideration. Activations during critical sports moments, including the English Premier League, Champions League Final, and the Euro Championships. Focus on our iconic key care compression apparel and the clone magnetico boot featuring a young stable of UA athletes, including Tony Rudiger of Real Madrid, Eddie and Ketia of Arsenal. We are very much in this conversation in European football.

Kevin Plank: The percentage of full price sales in our digital channel rose significantly, along with a reduced mix of outlet and clearance sales. So, although still in the early days of this strategy, we're optimistic about initial performance metrics, which include higher average order values. Regarding physical retail, we're focused on delivering service excellence and identifying areas to improve upselling, repeat business, and profitability. To support this, we're testing a new full price brand house concept and are pleased with the initial results.

Sean Kern: Higher average order values.

Sean Kern: Regarding physical retail we're focused on delivering service excellence in identifying areas to improve upselling repeat business and profitability to support. This we're testing a new full priced brand house concept and are pleased with the initial results seeing an improvement in productivity and revenue per visitor with cleaner sight lines are more keurig.

Kevin Plank: Seeing an improvement in productivity and revenue per visit, with cleaner Sightlines, a more curated product assortment, including nearly 50% fewer skews, and an evolved in-store presentation, athletes can more easily see and feel the power of the Under Armour brand.

Kevin Plank: We're also increasing our investment and paid social media influencers. Over the next few years, we intended double the number of influencers in our creator program to lean into fresh new content to drive reach and engagement. In line with this, we sign University Miami Women's College basketball players, Haley and Hannah Cavendr to a multi-year partnership. This serves as a metaphor for trying to get a sport authenticity and influencer relevance. With nearly seven million followers across Instagram and TikTok, it's great to welcome them to the brand.

Sean Kern: The product assortment, including nearly 50% fewer skus and an evolved in store presentation at.

Sean Kern: At least can more easily see and feel the power of the under armour brand.

Kevin Plank: All of this will come together even more beautifully later this year as we open our new flagship store at our new headquarters here in Baltimore before the end of December. At our factory house outlets, we're digging in to optimize this business better, especially in North America, which is critical to balancing future revenue and margin opportunities. During the quarter, we initiated trials with mixed results as we dialed various promotional levels up and down to assess volume and ASP impacts.

Sean Kern: All of this will come together, even more beautifully later this year as we opened our new flagship store at our new headquarters here in Baltimore.

Sean Kern: For the end of December.

Speaker Change: In our factory house outlets, we're digging in to optimize this business better, especially in North America, which is critical to balancing future revenue and margin opportunities.

Kevin Plank: Another first quarter highlight was demonstrating staying on our front-foot with collegiate assets, including extending our partnership with the University of Maryland to be the exclusive outfit of Athletics program, including 19 varsity sports and the University's club in intramural sports. With now seven power four teams for UA, 85 Division I squads and 350 Division II and Division III schools are NCAA presences, a testament to Under Armour being a brand that athletes trust.

Speaker Change: During the quarter, we initiated trials with mixed results as we dialed various promotional levels up and down to assess volume and ASP impacts an excellent test and learn as we solidify our go forward strategies.

Kevin Plank: An excellent test and learn as we solidify our go-forward strategy. We're also working to change our assortment and segmentation, including less made-for-outlet products, SKU reductions, elevated visual presentations, and full-price selling, all geared to harnessing this platform more effectively to generate capital for other parts of our business. Our loyalty program is also giving us an added boost in realizing improved long-term growth, profitability, and higher brand engagement. With less than a year under its belts in North America, UA Rewards has grown quickly, and its performance has been a positive contributor.

Sean Kern: We're also working to change our assortment and segmentation, including less made for outlet products SKU reductions elevated visual presentations and full price selling.

Kevin Plank: A true sports house. We also announced our new partnership with USA football, the official and exclusive uniform apparel and footwear provider, including the US men's and women's national teams. This is also an excellent opportunity to have a front and center grassroots pathway to the finding flag football, across more than a million member athletes by integrating it into our existing UA next platform. We're very excited about this, especially as it leads to flag football's debut.

Speaker Change: All geared at harnessing this platform more effectively to generate capital for other parts of our business.

Speaker Change: Our loyalty program is also giving US an added boost in realizing improved long term growth profitability and higher brand engagement with.

Speaker Change: With less than a year under our belts in North America UA rewards is growing quickly and its performance has been a positive contributor.

Kevin Plank: The program has nearly 5 million members and is growing month by month. It's exciting, too, that about half of recent enrollments are new to the brand. This is an excellent sign of expanding our reach with unique visitors. Further, nearly 60% of our North American DTC revenue comes from UA Reward members, and we're showing roughly 50% higher revenue per consumer, along with a three-fold increase in the 90-day repurchase rate compared to non-

Speaker Change: The program has nearly 5 million members and is growing month by month.

Kevin Plank: At the 2028 Summer Olympics, in Los Angeles, where UA will be the official outfiter for Team USA competing on the gridiron. And speaking of the Olympics, with more than 70 athletes from 26 countries across 28 sports representing UA, we've had a fantastic roster on the world's largest, most famous athletic stage. A few call outs, of course, are Steppen Curry and Kelsey Plum on the US men's and women's basketball teams. New York City marathon winner Sharon Locati representing Kenya at our first games. And Furman Lopez, a key Spanish player, who's led his team to the final of the Olympic football tournament by scoring four goals and two assists in just five games.

Sean Kern: Citing to that about half of recent enrollments are new to the brand.

Sean Kern: Is an excellent sign of expanding our reach with unique visitors.

Sean Kern: Further nearly 60% of our North American DTC revenue comes from UA reward members and we're showing roughly 50% higher revenue per consumer along with a threefold increase in the 90 day repurchase rate compared to nonmembers, so very encouraging for the long term.

Kevin Plank: So very encouraging for the long term, now shifting to wholesale. Following meetings with key global retail partners, I'm happy to report that they are encouraged by our progress and optimistic about the potential of our strategy. As mentioned, it will take time for the Wholesale Channel to mature. We must allow for improved storytelling to take shape.

Speaker Change: Now shifting to wholesale.

Speaker Change: Following meetings with key global retail partners I'm happy to report that they are encouraged by our progress and optimistic about the potential of our strategy.

Speaker Change: As mentioned it will take time for the wholesale channel to inflect, we must allow for improved storytelling to take shape.

Kevin Plank: Next up is our second strategic priority, running smart plays and our work to optimize our business to clean up unnecessary complexity, meaning growth by constraint. Our approach here is simple, test all existing rules to determine how to take advantage of all business dimensions more efficiently. Accordingly, no areas left unturned and all systems, structures and processes must have a clearer and well-defined purpose and output and definition of success. Though a difficult decision, our restructuring program has given us a head start in streamlining the organization.

Kevin Plank: In the interim, we're changing the script on what it means to be a UA partner and are committed to strengthening our crucial..., count relationships in each distribution tier. In addition to working out improved segmentation with our current mix of products, we're partnering on better integrated planning and joint marketing opportunities. End quote, though early in our journey to reconstitute Under Armour's brand strength.

Speaker Change: In the interim we're changing the script on what it means to be a UA partner and are committed to strengthening our crucial account.

Speaker Change: Account relationships and each distribution tier.

Speaker Change: In addition to working out and prove segmentation with our current mix of products, we're partnering on better integrated planning and joint marketing opportunities.

Speaker Change: In closing.

Speaker Change: Though early in our journey to reconstitute under Armours brand strength.

Kevin Plank: We're making tangible progress in building a more premium product offering. We're running smarter plays by tightening up our SG&A, reducing skews and materials, and beginning to elevate the consumer shopping experience. Amid the early progress we're making, and Air coming on board to fill a critical missing piece of our puzzle through marketing... will continue to empower and evolve our culture to reduce complexity and be more deliberate in everything we do. I have every confidence that our improving level of execution will result in a better presentation of the Under Armour brand through building this sports house. There's much to do, but we're undeniably back on offer. With that, I'll hand it over to Dave for more details on the results and outlook. Dave?

Speaker Change: We're making tangible progress in building a more premium product offering we're running smarter plays by tightening up our SG&A, reducing skus in materials and beginning to elevate consumer shopping experiences.

Kevin Plank: During the quarter, we right sized our workforce and are executing various transformational initiatives and advancing considerations around facilities, software and other areas. As a result of some of this work, we've begun laying out projects to automate tasks and decision making processes using both traditional and AI solutions to unlock data driven insights and operational improvements. So, very promising for long-term efficiency gains. An output of complexity led to the creation of, frankly, too many products that without proper segmentation and marketplace differentiation have challenged brand affinity.

Speaker Change: Amid the early progress, we're making and are coming on board to fill a critical missing piece of our puzzle through the marketing lens, we will continue to empower and evolve our culture to reduce complexity and being more deliberate in everything we do.

Speaker Change: I have every confidence that our improving level of execution will result in a better presentation of the under armour brand.

Speaker Change: We're building this sports house.

Speaker Change: There is much to do but were undeniably back on offense.

Dave: I'll hand, it over to Dave for more details on our results and outlook, Dave Thanks, Kevin starting right in with the results our first quarter of fiscal 2025, which came in better than our outlook revenue was down 10% to $1 2 billion with a 14% decline in North America due to softer full priced wholesale demand and lower sales to.

David Bergman: Thanks, Kevin. Starting right in with the results of our first quarter of fiscal 2025, which came in better than our forecast. Revenue was down 10% to $1.2 billion, with a 14% decline in North America due to softer full-price wholesale demand and lower sales to the off-price channel.

Kevin Plank: In this respect, I've tasked our team with achieving a 25% skewer reduction over the next 18 months and we're making solid progress toward the subjective. This is not, however, a blanket strategy across our good, better, best construct. In order to apply to all categories equally, we're being surgical in this effort, distorting toward areas of opportunity with the highest returns, both financially and strategically from a brand-building perspective and purposely over-indexing towards better and best-level products as we elevate our brand position.

Dave: The off price channel.

David Bergman: Our DTC business was also down during the quarter, driven mainly by a decline in our e-commerce business resulting from proactive strategies to reduce promotional activity and a decline in our retail store sales. However, revenue in EMEA was flat on a reported and currency-neutral basis, which strengthened our DTC business, partially offset by a slight decline in wholesale. APAC revenue was down 10% or down 7% on a currency-neutral basis, driven by declines in our wholesale and DTC businesses amid a softening macro that impacted consumer traffic and a highly competitive and promotional environment in the region.

Dave: Our DTC business was also down during the quarter driven mainly by a decline in our e-commerce business, resulting from proactive strategies to reduce promotional activity and a decline in our retail store sales.

Kevin Plank: We're also working to become smarter, more efficient by modernizing our supply chain with two primary objectives, improving our end-to-end planning and cross-channel capabilities, led by Chief Supply Chain Officer Sean Kern, our end-to-end planning work spans multiple disciplines, aiming to enhance our ability to plan better and protect our consumer's needs, to optimize our assortments and manage inventory across regions, channels and retail doors. We've also started a multi-year distribution logistics modernization initiative to enable cross-channel capabilities to optimize cost, maximize speed, ensure inventory availability and increase service levels across our DTC and wholesale businesses.

Dave: Revenue in EMEA was flat on a reported and currency neutral basis with strength in our DTC business, partially offset by a slight decline in wholesale.

Dave: APAC revenue was down 10% or down 7% on a currency neutral basis, driven by declines in our wholesale and DTC businesses amid a softening macro that impacted consumer traffic.

Dave: And a highly competitive and promotional environment in the region.

David Bergman: In Latin America, revenue was up 16% or up 12% on a currency-neutral basis, with solid growth among regional distributors. From a channel perspective... First Quarter Wholesale revenue was down 8%, driven by softer demand in our full price and distributor businesses, along with lower sales to the off-price channel. Direct to consumer revenue declined 12% with a 25% decline in e-commerce as we work to evolve this channel to a more premium positioning via lower promotions and discounts, and sales from our own and operator retail stores were down 3%.

Dave: In Latin America revenue was up 16% or up 12% on a currency neutral basis with solid growth among regional distributors.

Dave: From a channel perspective first.

Kevin Plank: That takes us to our third priority, elevating consumer experiences, where we're focused on driving excellence across our direct consumer and wholesale businesses. In DTC, the first quarter marked the beginning of our journey to elevate our North American e-commerce business toward a more significant and premium consideration. As expected, our e-commerce revenue was down, driven by roughly a third fewer promotional days than last year. However, positively, the percentage of full-price sales in our digital channel rose significantly, along with a reduced mix of outlet and clearance sales.

Dave: First quarter wholesale revenue was down 8% driven by softer demand in our full price and distributor businesses, along with lower sales to the off price channel.

Dave: Direct to consumer revenue declined 12% with a 25% decline in E. Commerce as we worked to evolve this channel to a more premium positioning via lower promotions and discounts.

Dave: And sales from our owned and operated retail stores were down 3%.

David Bergman: Licensing was down 14% due to declines in our North American and Japanese businesses. By product type, apparel revenue was down 8%, with declines across most categories partially offset by relative strength in golf. Footwear was down 15%, with declines across most categories, partially offset by relative strength in outdoor and golf. And our accessories business was down 5%.

Dave: Licensing was down 14% due to declines in our North American and Japanese businesses.

Kevin Plank: Although still the early days of this strategy were optimistic about initial performance metrics, which include higher average order values. Regarding physical retail, we're focused on delivering service excellence and identifying areas to improve, upselling, repeat business and profitability. To support this, we're testing a new full-price brand-house concept and are pleased with the initial results, seeing an improvement in productivity and revenue per visitor. With cleaner sight lines and more curated product assortment, including nearly 50% fewer skews, and an evolved in-store presentation, athletes can more easily see and feel the power of the underarmour brand. All of this will come together even more beautifully later this year, as we open our new flagship store at our new headquarters here in Baltimore before the end of December.

Dave: By product type.

Speaker Change: Apparel revenue was down 8% with declines across most categories, partially offset by relative strength in golf.

Speaker Change: Footwear was down 15% with declines across most categories, partially offset by relative strength in outdoor and golf.

Dave: And our accessories business was down 5%.

David Bergman: Our first quarter gross margin was up 110 basis points to 47.5%. This increase was driven by 170 basis points of pricing benefits due to lower levels of discounting and promotions, mainly in our direct-to-consumer business, because of our actions to drive a more premium positioning of our brand, and 40 basis points of supply chain benefits related to lower product costs and lower inventory reserves, partially driven by our first quarter overdrive. These benefits were partially offset by 60 basis points of headwinds from unfavorable regional and channel mix shifts and 50 basis points of unfavorable foreign currency impact.

Dave: Our first quarter gross margin was up 110 basis points to 47, 5%.

Dave: This increase was driven by 170 basis points of pricing benefits due to lower levels of discounting and promotions, mainly in our direct to consumer business because of our actions to drive a more premium positioning of our brand and.

Dave: And 40 basis points of supply chain benefits related to lower product costs and lower inventory reserves, partially driven by our first quarter overdrive.

Kevin Plank: In our factory-house outlets, we're digging in to optimize this business better, especially in North America, which is critical to balancing future revenue and margin opportunities. During the quarter, we initiated trials with mixed results as we dialed various promotional levels up and down to assess volume and ASP impacts, an excellent test and learn as we solidify our go-forward strategies. We're also working to change our assortment and segmentation, including less made-for-outlet products, skew reductions, elevated visual presentations and full-price selling. All geared at harnessing this platform more effectively to generate capital for other parts of our business.

Dave: These benefits were partially offset by 60 basis points of headwinds from unfavorable regional and channel mix shifts and 50 basis points of unfavorable foreign currency impacts.

David Bergman: Our first quarter gross margin outperformance relative to the outlook we gave in May was due to three main factors. First, we were even less promotional than planned in our DTC business, as we started to test strategies for also reducing promotional activity in our factory house outlet stores, including less depth and discounts, which were not contemplated in our prior outlets. Second, inventory reserve needs were lower than planned, given a lower inventory balance and healthier overall composition. Third, we had some additional trailing benefits from year-over-year freight cost improvements compared to what was anticipated in our prior outpost. Moving down the P&L, our SG&A expenses increased 42% to $837 million in the first quarter.

Dave: Our first quarter gross margin outperformance relative to the outlook. We gave in May was due to three main factors.

Dave: First we were even less promotional than planned in our DTC business as we started to test strategies for also reducing promotional activity in our factory house outlet stores, including less depth and discounts, which was not contemplated in our prior outlook.

Kevin Plank: Our loyalty program is also giving us an added boost in realizing improved long-term growth, profitability and higher brand engagement. With less than a year under our belts in North America, UA rewards has grown quickly, and its performance has been a positive contributor. The program has nearly five million members and is growing month by month. Exciting too that about half of recent enrollments are new to the brand, so this is an excellent sign of expanding our reach with unique visitors.

Dave: Second inventory reserve needs were lower than planned given the lower inventory balance and healthier overall composition.

Kevin Plank: Further, nearly 60% of our North American DTC revenue comes from UA reward members, and we're showing roughly 50% higher revenue per consumer, along with a three-fold increase in the 90-day repurchase rate compared to non-members, so very encouraging for the long term.

Dave: Third we had some additional trailing benefits from year over year freight cost improvements compared to what was anticipated in our prior outlook.

Dave: Moving down the P&L, our SG&A expenses increased 42% to $837 million in the first quarter.

David Bergman: Excluding a litigation reserve, net of an insurance receivable, and transformation expense, adjusted SG&A expenses were down 6% to $555 million. This was mainly due to ongoing cost management actions, including headcount reductions and lower marketing expenses for the quarter. During the quarter, we recognized $25 million of restructuring charges and incurred $9 million of transformational expenses booked in SG&A. We have now realized $34 million of the estimated $70 to $90 million in anticipated charges and expenses under our existing plan. Bringing this together, we had an operating loss of $300 million, or excluding the litigation reserve, transformation expenses, and restructuring charges, our adjusted operating income was $8 million.

Dave: Excluding a litigation reserve net of an insurance receivable and transformation expenses.

Dave: Adjusted SG&A expenses were down 6% to $555 million.

Dave: This was mainly due to ongoing cost management actions, including headcount reductions and lower marketing expenses for the quarter.

Kevin Plank: Now, shifting to wholesale. Following meetings with key global retail partners, I'm happy to report that they are encouraged by our progress and optimistic about the potential of our strategy. As mentioned, it will take time for the wholesale channel to inflect. We must allow for improved storytelling to take shape. In the interim, we're changing the script on what it means to be a UA partner and are committed to strengthening our crucial account relationships in each distribution tier. In addition to working out improved segmentation with our current mix of products, we're partnering on better integrated planning and joint marketing opportunities.

Dave: During the quarter, we recognized $25 million of restructuring charges and incurred $9 million of transformational expenses booked in SG&A.

Dave: We have now realized $34 million of the estimated $70 million to $90 million and anticipated charges and expenses under our existing plan.

Dave: Bringing this together we had an operating loss of $300 million.

Dave: <unk>, excluding the litigation reserve transformation expenses and restructuring charges, our adjusted operating income was $8 million.

Dave: On the bottom line, we realized a diluted loss per share of <unk> 70.

Kevin Plank: In closing, though early in our journey to reconstitute Under Armour's brand strength, we're making tangible progress and building a more premium product offering. We're running smarter plays by tightening up our S-GNA, reducing skews and materials, and beginning to elevate consumer shopping experiences. Amid the early progress we're making and air coming on board to fill a critical missing piece of our puzzle through the marketing lens, we'll continue to empower and evolve our culture to reduce complexity and be more deliberate in everything we do. I have every confidence that our improving level of execution will result in a better presentation of the Under Armour brand through building this sports house. There's much to do, but we're undeniably back on offense.

David Bergman: On the bottom line, we realized a diluted loss per share of 70 cents, or an adjusted diluted earnings per share of one. These results were ahead of our outlook due to our revenue and gross margin overdrive and better SG&A expense control. From a balance sheet perspective, inventory was down 15% compared to last year, which was ahead of our expectations due to our revenue outperformance and effective inventory management. We continue to expect that our year-end inventory will be in line with fiscal 24.

Dave: Or an adjusted diluted earnings per share of <unk>.

Dave: These results were ahead of our outlook due to our revenue and gross margin overdrive and better SG&A expense control.

Dave: From a balance sheet perspective inventory was down 15% compared to last year, which was ahead of our expectations due to our revenue outperformance and effective inventory management.

Dave: We continue to expect that our year end inventory will be in line with fiscal 'twenty four.

David Bergman: At the end of the quarter, after paying down the remaining $81 million outstanding balance of our convertible senior notes and purchasing $40 million of Class C common stock, which retired 5.9 million shares, we had no borrowings under our $1.1 billion revolving credit facility and a strong cash position of $885 million.

Dave: At the end of the quarter after paying down the remaining 81 million outstanding balance of our convertible senior notes and purchasing $40 million of class a common stock, which retired five 9 million shares we had no borrowings under our $1 $1 billion revolving credit facility.

David Bergman: With that, I'll hand it over to Dave for more details on the results and outlook.

David Bergman: Thanks, Kevin. Starting right in with the results, our first quarter of physical 2025, which came in better than our outlook. Revenue was down 10% to 1.2 billion, with a 14% decline in North America to the softer full price wholesale demand and lower sales to the off-priced channel. Our DTC business was also down during the quarter driven by mainly by a decline in our e-commerce business resulting from proactive strategies to reduce promotional activity and a decline in our retail store sales.

Dave: And our strong cash position of $885 million.

David Bergman: Moving next to our Fiscal 25 Outlook. Our expectation that full-year revenue will decline at a low double-digit percentage rate has not changed. In summary, we exceeded our expectations in North America during the first quarter, and thus, we are modestly improving our full-year expectation for the region to now be down 14 to 16 percent. However, the North American improvement in our full-year forecast is expected to be offset by increasing market pressures in APAC for the balance of the year.

Dave: Shifting next to our fiscal 'twenty five outlook.

Dave: Our expectation that full year revenue will decline at a low double digit percentage rate has not changed.

Dave: In summary, we exceeded our expectations in North America during the first quarter and thus we are modestly improving our full year expectation for the region to now be down 14% to 16%. However.

Dave: However, the North American improvement in our full year forecast is expected to be offset by increasing market pressures in APAC for the balance of the year.

David Bergman: Revenue in Ameyo was flat on a reported and currency neutral basis, with strength in our DTC business partially offset by a slight decline in wholesale. APEC revenue was down 10% for down 7% on a currency neutral basis driven by declines in our wholesale and DTC businesses amid a softening macro that impacted consumer traffic and a highly competitive and promotional environment in the region. In Latin America, revenue was up 16%, or up 12% on a currency neutral basis with solid growth among regional distributors.

David Bergman: Next, we expect a low single-digit percentage decline in our international... Within that, I'd like to give some regional color given the divergence in recent results between APAC and EMEA, and thus balance of year expectations. For Fiscal 25, we expect revenue in EMEA to be flat as we continue to protect the brand strength we've built in the region amid an uncertain macro environment. In APAC, we anticipate revenue will be down at a high single-digit percentage rate, reflecting lower consumer demand and traffic.

Dave: Next we expect a low single digit percentage decline in our international business within that I'd like to give some regional color given the divergence in recent results between APAC and EMEA and thus balance of year expectations.

Dave: For fiscal 'twenty five we expect revenue in EMEA to be flat as we continue to protect the brand strength, we built in the region amid an uncertain macro environment.

Dave: In APAC, we anticipate revenue will be down at a high single digit percentage rate, reflecting lower consumer demand and traffic trends.

David Bergman: From a channel perspective, first quarter wholesale revenue was down 8%, driven by softer demand in our full price and distributor businesses along with lower sales to the off-priced channel. Direct consumer revenue declined 12%, with a 25% decline in e-commerce as we work to evolve this channel to a more premium positioning via lower promotions and discounts. And sales from our own and operator retail stores were down 3%. Licensing was down 14% due to declines in our North American and Japanese businesses.

David Bergman: Moving to gross margin, although we saw a significantly better-than-anticipated result in our first quarter, our expectation for a 75 to 100 basis point improvement for the full year has not changed. There are three main reasons for this Q1 overdrive not passing through to the full year. First, emerging ocean freight cost headwinds. Second, developing negative impacts from changes in foreign currency. And third, a more unfavorable channel mix due to lower licensing sales and challenged margins in the off-price channel.

Speaker Change: Moving to gross margin, although we saw a significant better than anticipated results in our first quarter, our expectation for a 75 to 100 basis point improvement for the full year has not changed there are three main reasons for this Q1 overdrive not passing through to the full year first emerging ocean.

Dave: Cost headwinds.

Dave: Second developing negative impacts from changes in foreign currency and third a more unfavorable channel mix due to lower licensing sales and challenged margins in the off price channel.

David Bergman: By product type, a parallel revenue was down 8% with declines across most categories partially offset by relative strength in golf. Footwear was down 15% with declines across most categories, partially offset by relative strength in outdoor and golf. And our accessories business was down 5%. Our first quarter gross margin was up 110 basis points to 47.5%. This increase was driven by 170 basis points of pricing benefits due to lower levels of discounting and promotions, mainly in our direct consumer business because of our actions to drive a more premium positioning of our brand.

David Bergman: Relative to SG&A, excluding the litigation reserve expense and the midpoint of total estimated charges and related expenses of our restructuring plan, adjusted SG&A is expected to decline at a low to mid single-digit percentage rate. This includes anticipated savings of approximately $40 million in fiscal 25 from restructuring actions this year.

Dave: Relative to SG&A, excluding the litigation reserve expense and the midpoint of total estimated charges and related expenses of our restructuring plan.

Dave: Adjusted SG&A is expected to decline at a low to mid single digit percentage rate.

David Bergman: And 40 basis points of supply chain benefits related to lower product costs and lower inventory reserves, partially driven by our first quarter overdrive. These benefits were partially offset by 60 basis points of headwinds from unfavorable regional and channel mix shifts and 50 basis points of unfavorable foreign currency impacts. Our first quarter gross margin outperformance relative to the outlook we gave in May was due to three main factors. First, we were even less promotional than planned in our DTC business as we started the test strategies for also reducing promotion activity in our factory house outlet stores, including less depth and discounts, which was not contemplated in our prior outlook.

Dave: This includes anticipated savings of approximately $40 million in fiscal 'twenty five from restructuring actions this year.

David Bergman: Adjusted operating income is now anticipated to reach $140 to $160 million, up $10 million from our prior outlook, and Adjusted Diluted Earnings Per Share is expected to be $0.19 to $0.22. Next, I'd like to give some color on our expectations for our second quarter, Fiscal 25, starting with revenue, which we expect to be down approximately 12% compared to the prior year. This decline assumes continued wholesale software.

Dave: Adjusted operating income is now anticipated to reach $140 million to $160 million up $10 million from our prior outlook and.

Dave: And adjusted diluted earnings per share is expected to be 19 to 22.

Speaker Change: Next I'd like to give some color on our expectations for our second quarter fiscal 25, starting with revenue.

Dave: Which we expect to be down approximately 12% compared to the prior year. This.

Dave: This decline assumes continued wholesale softness and proactive strategies to reduce promotional activities in our DTC business, particularly in North American E Commerce.

David Bergman: Proactive Strategies to reduce promotional activities in our DTC Business, particularly in North American e-commerce. Second quarter gross margin is anticipated to be up 20 to 30 basis points due to benefits from lower product costing and less DTC discounting, partially offset by more expensive ocean freight and unfavorable foreign currency impact. Adjusted SG&A is expected to decline at a high single-digit rate in the second quarter, partially driven by approximately 4 to 5 percentage points from an anticipated insurance recovery related to litigation expenses paid in prior periods.

Dave: Second quarter gross margin is anticipated to be up 20 to 30 basis points due to benefits from lower product costing and less DTC discounting, partially offset by more expensive ocean freight and unfavorable foreign currency impacts.

Dave: Adjusted SG&A is expected to decline at a high single digit rate in the second quarter, partially driven by approximately four to five percentage points from an anticipated insurance recovery related to litigation expenses paid in prior periods.

David Bergman: Second, inventory reserve needs were lower than planned, given a lower inventory balance and healthier overall composition. Third, we had some additional trailing benefits from year-over-year freight cost improvements compared to what was anticipated in our prior outlook. Moving down the PNL, our SNA expenses increased 42% to 837 million in the first quarter, excluding a litigation reserve, net of and insurance receivable and transformation expenses, adjusted SNA expenses were down 6% to 555 million.

David Bergman: Additionally, this decline includes lower expenses related to headcount reductions and a shift in the timing of marketing expenses, which will be considerably higher in our third quarter. This takes us to an expected second quarter adjusted operating income of $110 to $120 million and an adjusted diluted earnings per share of $0.18 to $0.20. Finally, some color on how we expect our cash to evolve in fiscal 25. After funding our legal settlement payment in the second quarter with cash on hand and our expected cash flow generation in fiscal 25, we expect to end the year with approximately $500 million in cash and no borrowings outstanding on our $1.1 billion revolver.

Dave: Additionally, this decline includes lower expenses related to head count reductions and a shift in the timing of marketing expenses, which will be considerably higher than our third quarter.

Dave: This takes us to an expected second quarter, adjusted operating income of $110 million to $120 million.

Dave: And in 18 to 20.

David Bergman: This was mainly due to ongoing cost management actions, including headcount reductions and lower marketing expenses for the quarter. During the quarter, we recognized 25 million of restructuring charges and incurred 9 million of transformational expenses booked in SNA. We have now realized 34 million of the estimated 70 to 90 million in anticipated charges and expenses under our existing plan. Bringing this together, we had an operating loss of 300 million, or excluding the litigation reserve transformation expenses and restructuring charges, our adjusted operating income was 8 million.

Dave: Adjusted diluted earnings per share.

Dave: Finally, some color on how we expect our cash to evolve in fiscal 'twenty five.

Dave: After funding our legal settlement payment in the second quarter with cash on hand, and our expected cash flow generation in fiscal 'twenty five we expect to end the year with approximately $500 million in cash and no borrowings outstanding on our $1 $1 billion revolver.

David Bergman: Now, to close out today's prepared remarks, I'd underscore that we are encouraged by the early progress we're making to reconstitute the Under Armour brand and are tracking well against our strategy. With a leadership team and culture that are becoming more decisive quarter by quarter, we will continue to test and learn as we optimize our Protect This House strategy. And we are confident in our ability to establish the premium positioning we know the Under Armour brand deserves and set a higher quality revenue base that leads to improved sustainable growth and profitability over the long term.

Speaker Change: Now to close out today's prepared remarks, I'd underscore that we are encouraged by the early progress, we're making to reconstitute the under armour brand and are tracking well against our strategies with our leadership team and culture that gets more decisive quarter by quarter, We will continue to test and learn as we optimize our protect this house strategy.

David Bergman: On the bottom line, we realized a diluted loss per share of 70 cents, or an adjusted diluted earnings per share of 1 cents. These results were ahead of our outlook due to our revenue and gross margin overdrive and better SNA expense control. From a balance sheet perspective, inventory was down 15% compared to last year, which was ahead of our expectations due to our revenue outperformance and effective inventory management. We continue to expect that our year end inventory will be in line with fiscal 24.

Dave: And we are confident in our ability to establish the premium positioning we know the under armour brand deserves and.

Dave: And set a higher quality revenue base that leads to improved sustainable growth and profitability over the long term.

David Bergman: With that, we'll open it up for questions. Operator. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone. If using a speakerphone, please pick up your headset before pressing the keys.

Speaker Change: With that we'll open it up for questions operator.

Operator: To withdraw your question, please press star then 2. At this time, we'll pause momentarily to assemble our... Our first question will come from Jay Sole with UBS. You may now go ahead. Great. Thank you so much.

Speaker Change: We will now begin the question and answer session.

Speaker Change: Last question you May Press Star then one on your telephone keypad.

Speaker Change: Speakerphone, please pick up your handset.

David Bergman: At the end of the quarter, after paying down the remaining 81 million outstanding balance of our convertible senior notes and purchasing 40 million of class C common stock, which retired 5.9 million shares, we had no borrowing under our 1.1 billion revolving credit and a strong cash position of 885 million. Shifting next to our fiscal 25 outlook, our expectation that full-year revenue will decline at a low double-digit percentage rate has not changed.

Speaker Change: Keith.

Speaker Change: To withdraw your question. Please press Star then two.

Dave: At this time, we will pause momentarily to assemble the roster.

Jay Sole: Kevin, it's clear you see some good progress happening in the business. Can you just tell us about what gives you confidence in the company's ability to deliver on the sales growth guidance that's implied in the guidance for the second half of the year and what you see happening there? Thank you so much.

Jay Sole: Our first question will come from Jay sole with UBS you.

Dave: You May now go ahead.

Jay Sole: Great. Thank you so much.

Speaker Change: Kevin It's clear you see some good progress happening in the business can you just tell us about what gives you confidence in the company's ability to deliver on the sales growth guidance. That's implied in the guidance for the second half of the year and what you see happening there. Thank you so much.

David Bergman: In summary, we exceeded our expectations in North America during the first quarter, and thus we are modestly improving our full-year expectation for the region to now be down 14 to 16%. However, the North American improvement in our full-year forecast is expected to be offset by increasing market pressures in APAC for the balance of the year. Next, we expect a low single-digit percentage decline in our international business. Within that, I'd like to give some regional color given a divergence in recent results between APAC and AMAIA and thus balance of year expectations.

Kevin Plank: Yeah, thanks, Cher. I believe that we're... I think we've got a really healthy view of the business right now. I think that, you know, what we did on the last call is we put ourselves in a position to make the best decisions for the brand. You know, I've introduced this term sports house that we took to our partners and, frankly, to our team and anyone around this business of just understanding sort of getting lost in the moment of the day. We recognize where we are. We're not crazy about it, but we're also doing something to change the weather, I think.

Speaker Change #115: Yeah. Thanks, sure I believe that we're in.

Speaker Change #100: I think we've got a really healthy.

Dave: View of the business right now I think that.

Speaker Change: What we did on the last call that we put ourselves in a position to make the best decisions for the brand.

Speaker Change: I've introduced this term sports house that we took to our partners.

Dave: And frankly to our team and anyone around this business of just understanding of sort of getting lost up in the moment of the day, we recognize where we are.

Speaker Change: We're not crazy about it but we're also doing something to change I think the weather and so.

Kevin Plank: And so the effect that we're having, I think, is number one, just slowly, prudently putting the best team together, which is everything, I think. Really getting after our strategy, which is something that, you know, I don't think it's been off. I think it's been a matter of execution.

Speaker Change: The effect that we're having I think it was number one just slowly prudently putting the best team together, which is everything I think.

David Bergman: For fiscal 25, we expect revenue in AMAIA to be a flat. As we continue to protect the brand strength we've built in the region amid an uncertain macro environment. In APAC, we anticipate revenue will be down at a high single-digit percentage rate, reflecting lower consumer demand and traffic trends. Moving to Gross Margin, although we saw a significant better than anticipated result in our first quarter, our expectation for a 75 to 100 basis point improvement for the full-year has not changed.

Speaker Change: Really getting after our strategy, which is something that.

Speaker Change: I don't think it's been off I think it's been a matter of execution and so making sure that our team is super clear on what the objectives are and what the definition of successes and so the addition of the ability to attract a plus talent like.

Kevin Plank: And so, you know, the addition of the ability to attract A-plus talent, like bringing Eric on board, is probably a great proof positive that we're, you know, heading in the right direction with that. So I feel good and, you know, I think there are a lot of macro things that are going on right now that may affect what or where we are in the world.

Speaker Change: Bringing Eric on board is probably a great proof positive that we're heading in the right direction with that so I feel good and.

Speaker Change: I think there is a lot of macro things that are going on right now that may affect what are where we are in the world.

David Bergman: There are three main reasons for this Q1 overdrive not passing through to the full year. First, emerging ocean freight cost headwinds. Second, developing negative impacts from changes in foreign currency. And third, a more unfavorable channel mix to the lower licensing sales and challenge margins in the off-priced channel. Relative to S-GNA, excluding the litigation reserve expense and the midpoint of total estimated charges and related expenses of our restructuring plan, adjusted S-GNA is expected to decline at a low to mid-single-digit percentage rate.

Kevin Plank: But you know, we've got our heads down, and, you know, there's certainly no, there's not a lot of high fives yet, but there's definitely a growing sense of, in terms of what we've accomplished to date. But there's definitely a sense of what's coming, and we're very proud of that. Okay. Thank you so much.

Speaker Change: But we've got our head down and Theres certainly no.

Dave: Theres not a lot of high fives, yet, but there's definitely a growing sense of in terms of what we've accomplished to date, but there is definitely a sense of what's coming and we're very proud of that.

Speaker Change #117: Got it alright, thank you so much.

Jay Sole: Thank you Jay.

Jay Sole: Thank you, Jay. Our next question will come from Bob Drubal with Google. You may now go ahead. Good morning.

Bob <unk>: Our next question will come from Bob <unk> with Guggenheim.

Speaker Change #101: You May now go ahead.

Bob Drubal: Just a couple of questions for me. The first one, Kevin, on the business overall, you seem to have a sharper direction on product. Can you comment a little more on the evolution of your marketing, how long you think you will feel more confident about that, and then, you know, when you think about brand marketing, what's working, what's not working, you know, where do you think you can do a better job, and what does Eric bring to the table on that? Thanks.

Bob Drubal: Good morning, just a couple of questions from me the first one.

Speaker Change #101: Kevin on the business overall, you seem to have a sharper direction and product can.

David Bergman: This includes anticipated savings of approximately 40 million in fiscal 25 from restructuring actions this year. Adjusted operating income is now anticipated to reach 140 to 160 million. Up to 10 million from our prior outlook and adjusted deluded earnings per share is expected to be 19 to 22 cents. Next, I'd like to give some color on our expectations for our second quarter, fiscal 25, starting with revenue, which we expect to be down approximately 12 percent compared to the prior year.

Bob Drubal: Can you comment a little more on the evolution of your marketing how long until you feel more confident about that and then when you think about the brand marketing what's working what's not working where do you think you can do a better job than what does Eric bring to the table on that thanks.

Kevin Plank: Thank you. On the last call, I think we did a good job laying out the importance of product, story, and region and how those three things work together. We've also done a good job as part of the presentation that we took, you know, really around the world to our key partners and teammates, etc., and we told them that what's critical for Under Armour to do is to make sure that, you know, we're bringing in talent.

Speaker Change #103: Thank you on the last call I think we did a good job laying out the importance of product story in region and those three things working well.

David Bergman: This decline assumes continued wholesale softness and proactive strategies to reduce promotional activities in our DTC business, particularly in North American e-commerce. Second, quarter gross margin is anticipated to be up 20 to 30 basis points due to benefits from lower product costing and less DTC discounting, partially offset by more expensive ocean freight and unfavorable foreign currency impacts. Adjusted S-GNA is expected to decline at a high single-digit rate in the second quarter, partially driven by approximately 4 to 5 percentage points from an anticipated insurance recovery related to litigation expenses paid in prior periods.

Speaker Change #103: We've also done a good job as part of the presentation that we took really around the world to our key partners and teammates et cetera, and we told them that what's what's critical for under armour to do is to make sure that.

Speaker Change #103: We're bringing in a talent and I think if you look at the way that this table has evolved the executive leadership team table has evolved over the last frankly eight to 10 months.

Kevin Plank: And I think if you look at the way that this table has evolved, the executive leadership team table has evolved, you know, over the last, frankly, 8 to 10 months, it's pretty significant. And, you know, product was a metaphor that I used to describe where, you know, we brought in some, you know, A-plus talent between John Barbados, Yaron White, and, of course, Yasin, who's heading that function.

Jay Sole: Pretty significant.

Jay Sole: And product was a metaphor that I used to describe as where we brought in some a plus talent between John Barbados Huron White and of course, youre seeing who's heading that function up but what makes them. So powerful is the fact that they are joining a team of leaders of of partners that we already have here in the business of <unk>.

Kevin Plank: But what makes them so powerful is the fact that they're joining a team of leaders and partners that we already have here in the business: Dan Larrera has been with us for 13 years, Kyle Blakely for 15 years, Jeanette Robertson, who's another, you know, dozen years at UA.

Speaker Change: 13 years, Carl Blakely 15 years, Jeanette Robertson, who is another dozen years at UA, we just have this.

David Bergman: Aditionally, this decline includes lower expenses related to headcount reductions and a shift in the timing of marketing expenses, which will be considerably higher in our third quarter. This takes us to an expected second quarter adjusted operating income of 110 to 120 million, and an 18 to 20 cents of adjusted deluded earnings per share. Finally, some color on how we expect our cash to evolve in fiscal 25. After funding our legal settlement payment in the second quarter with cash on hand and our expected cash flow generation in fiscal 25, we expect to end the year with approximately 500 million in cash and no borrowings outstanding on our 1.1 billion revolver.

Kevin Plank: You know, we just have this, you know, a real depth, I think, of talent. And so I feel the same way about the impetus of someone like an Eric joining our business, being able to balance out that troika of product, story, and region of what we can do from a storytelling standpoint. And, you know, obviously, the biggest need, and I'll come back to marketing in a second, the biggest need that we have is, you know, we need to be aggressive in North America. And I just want to go back to people and be able to reference a partner that I have and someone like CareTrent who's leading their force.

Dave: A real depth I think of talent, so I feel the same way of.

Dave: The emphasis of someone like an Eric joining our business.

Dave: Of being able to balance out that troika of product story in region.

Dave: Of what we can do from a storytelling standpoint, and obviously the biggest need and I'll come back to marketing in the second the biggest need that we have as we.

<unk>: We need to be aggressive in North America, and I, just want to go back to people and being able to reference a partner that I have in someone like <unk>, who is leading there for us and so.

Dave: Youre there is definitely a new mix, but it is something which I think is a formula. So we're just we're stabilizing the business, we're being consistent with the strategy right now.

Kevin Plank: And so there's definitely a new mix, but it's something which I think is a formula. So we're just stabilizing the business, we're being consistent with the strategy right now, and frankly, after, you know, a very, probably too long of a time, an extended period of time of the ability to bring in a professional like Eric, who, my priorities when I got Eric here were, number one, just landing the plane with someone who is, you know, such a terrific A-plus talent in the industry. But I was also thinking about how we could get him horizontal as quickly as possible.

Dave: And frankly after a very.

Dave: Probably too long of a time, an extended period of time of the ability to bring in a professional like Eric.

David Bergman: Now to close out today's prepared remarks, I'd underscore that we are encouraged by the early progress we're making to reconstitute the Under Armour brand and are tracking well against our strategies. With a leadership team and culture that gets more decisive quarter by quarter, we will continue to test and learn as we optimize or protect this health strategy. We are confident in our ability to establish the premium positioning we know the Under Armour brand deserves and set a higher quality revenue base that leads to improved, sustainable growth and profitability over the long-term.

Dave: My.

Eric Litkey: My priorities when getting Eric here was number one just landed the plane with someone who has such a <unk>.

Eric Litkey: Terrific, a plus talent from the industry, but it was also thinking about how we could get them horizontal as quickly as possible and so that's why the role of marketing is something that will really I think is the unlock for the brand.

Kevin Plank: And so that's why the role of marketing is something that will really, I think, unlock the brand. The terrific products are important, but I do feel like we're a company that's been, you know, left more to just selling on the logo and a price tag next to it versus articulating the actual depth of the story that we have available, you know, about each incredible product that we build. So, you know, we're a company that spent, you know, half a billion dollars, or we'll be spending half a billion dollars in marketing, you know, just last year and this year, and I'm not sure that that's being felt.

Speaker Change: The terrific products are important but I do feel like we're a company that's been left more to just selling on the logo and a price tag next to it versus articulating the actual depth of story that we have available about each incredible product that we build so.

Operator: With that, we'll open it up for questions, operator. We will now begin the question and answer session. To ask a question, you may press start in one on your telephone keypad. If using a speaker phone, please pick up your hands up before pressing Q. To a broader question, please press start in two. At this time, we'll pause momentarily to assemble a roster.

Speaker Change: We're a company that spent.

Speaker Change: <unk>, a $1 billion or would it be spending half a billion dollars in marketing just last year and this year and I'm not sure that that's felt.

Kevin Plank: And so there's a tremendous opportunity for us to go attack our 16- to 24-year-old varsity athlete consumer and do it in a very authentic way. We spend a lot of time just focused on the gym, and while that's important, we want to be focused on the field.

Jay Sole: So theres a tremendous opportunity for us to go attack or 16 to 24 year old varsity athlete consumer and do it in a very authentic way we'd spent a lot of time just focused on the gym and while that's important.

Jay Sole: We want to be focused on the field, we want articulate our story through that voice and the products that will come from and it's not just the time for these athletes are on the field either but it's really focusing on the two and from them with sportswear can mean for us because I believe the opportunity for UA is different in sportswear then it maybe it is for for other brands, but the way that we're going to convey that story is going.

Operator: We want to articulate our story, you know, through that voice and the products that will come from it. It's not just the time when these athletes are on the field either, but it's really focusing on the to and from and what sportswear can mean for us, because I believe the opportunity for UA is different in sportswear than it is for other brands. But the way that we're going to convey that story is going to be a little bit different.

Jay Sole: Our first question will come from Jay Sol with UBS. You may now go ahead. Great. Thank you so much. Kevin, it's clear you see some good progress happening in the business.

Jay Sole: Can you just tell us about what gives you confidence in the company's ability to deliver on the sales growth guidance that's implied in the guidance for the second half of the year and what you see happening there? Thank you so much. Yeah, thanks, Jay. I believe that we've got a really healthy view of the business right now. I think that what we did on the last call, we put ourselves in a position to make the best decisions for the brand.

Operator: We're going to do it through the authenticity that we have on the field court and pitch. Our next question will come from Simeon Siegel with BMO Capital Markets. You may now go ahead. Thanks, everyone, good morning. I hope you're having a nice summer.

Jay Sole: A little bit different we're going to do it through the authenticity that we have on the field <unk> pitch.

Dave: Thank you.

Dave: Okay.

Dave: Our next question will come from Simeon Siegel with BMO capital markets.

Speaker Change #103: You May now go ahead.

Simeon Siegel: Thanks, Hi, everyone. Good morning, I have a nice summer.

Simeon Siegel: So Kevin, nice to see the first step in the brand re-elevation. Just when you think through the North America resets and that 25% skew reduction you mentioned, could you elaborate a little bit more on how that plays in terms of reducing specific categories, specific sports, retail partners, price points? You alluded to it, but maybe any more thoughts on how you're going to approach that would be helpful. And just as you think about that reduction, how are you thinking about units versus price expectations within the revenue guide? Yeah, thanks, Simeon.

Simeon Siegel: So Kevin nice to see the first step in the brand renovation just when you think through the North America resets in that 25% SKU reduction you mentioned could you elaborate a little bit more on how that plays in terms of reducing specific categories to explore its retail partners price points, just you alluded to it but maybe any more thoughts on how you're going to approach that would be helpful. And just as you think about that reduction how are you.

Jay Sole: I've introduced this term sports house that we took to our partners and frankly to our team and anyone around this business of just understanding of not sort of getting lost up in the moment of the day. We recognize where we are. We're not crazy about it, but we're also doing something to change, I think, the weather. And so the effect that we're having, I think, is number one, just slowly, prudently putting the best team together, which is everything.

Speaker Change #103: Are you thinking about units versus price expectations within the revenue guidance.

Dave: Yes.

Simeon Siegel: Yeah. Thanks Simeon.

Kevin Plank: I think we're going to be really thoughtful. As I said in my prepared remarks, this isn't going to be just one fell swoop. We're going to be thoughtful. We're going to be strategic and surgical with where we decide to make trends. But frankly, the idea of the 25% SKU reduction is as much of a metaphor for the organization today because there's not a person in the world who doesn't feel like they've got too much on their plate.

Speaker Change #113: I think we're going to be really thoughtful as I said in my prepared remarks.

Jay Sole: I think really getting after our strategy, which is something that, you know, I don't think it's been off. I think it's been a matter of execution and so making sure that our team is super clear on what the objectives are and what the definition of success is. And so, you know, the addition of the ability to attract a plus talent like bringing Eric on board is probably a great proof positive that we're, you know, heading in the right direction with that.

Dave: This isn't going to be.

Dave: Just just one fell swoop, we're gonna be thoughtful we're gonna be strategic and surgical with where we decided to make.

Speaker Change #103: Trends, but frankly, the idea of a 25% SKU reduction it's as much of a metaphor for the organization. Today is there is that a person in the world who doesn't feel like they've got too much on their plate. So the ability to remove 25% of the work is an ambition for the team and what that you're reducing everything from factory visits to lab dip approvals and all the other work in basis that comes with it.

Kevin Plank: So the ability to remove 25% of the work is an ambition for the team. And with that, you're reducing everything from factory visits to lab dip approvals and all the other work and basis that comes with it. But as we've said, to be an Under Armour product, that's got to be a process. And that has to be something which has to be vetted and gone through in a way that it needs to be special. It can't just be another t-shirt or another shoe. It needs to be a true piece of performance equipment that actually helps make you better.

Jay Sole: So I feel good and, you know, I think there's a lot of macro things that are going on right now that may affect what are where we are in the world. But, you know, we've got our head down and, you know, there's certainly no, there's not a lot of high fives yet, but there's definitely a growing sense of, in terms of what we've accomplished to date. But there's definitely a sense of what's coming and we're very proud of that. God, okay, thank you so much. Thank you, Jay.

Speaker Change #103: But as we've said to be an under armour product.

Speaker Change #103: That's got to be a process and that has to be something which has to be vetted and gone through in a way which is.

Speaker Change #103: It needs to be special it can't just be another T shirt or.

Dave:

Dave: Other shoe it needs to be a true piece of performance product that actually makes it helps them make you better and what we haven't done is we haven't done a good enough job I believe communicating that and so ensuring that as we say in our vision statement provides you with performance products you never knew you needed and once you try them can't imagine living without.

Kevin Plank: And what we haven't done is we haven't done a good enough job, I believe, communicating that. And so ensuring that, as we say in our vision statement, provides you with performance products you never knew you needed and, once you try them, can't imagine living without, feels like an opportunity that we need to get behind. I think it really becomes simple to Simeon that we're going to focus on our base layer compression product.

Bob Drbul: Our next question will come from Bob Drubel with Couguin Heine. You may now go ahead. Good morning. Just a couple of questions for me. The first one, Kevin, on the business overall, you seem to have a sharper direction in product. Can you comment a little more on the evolution of your marketing? How long, you know, until you feel more confident about that? And then, you know, when you think about the brand marketing, you know, what's working? What's not working? You know, where do you think you can do a better job and what does Eric bring to the table on that? Thanks. Thank you.

Dave: It feels like the opportunity that we need to get behind so.

Dave: I think it really becomes simple to sending is that we're going to focus on our base layer compression product.

Kevin Plank: It's really just going back to the foundations of the business. But we also have some things that have been working out and are profitable for us, like our Unstoppable Collection. It's getting behind when we've got Sharon Licati that'll be competing this weekend in the marathon wearing our Velocity Elite 2 runner, which is incredible. The slip speed program is something that we're going to get back behind, but we want to make sure that Under Armour isn't just selling a brand on a t-shirt. It's not just a logo. It needs to be more, and so contextualizing what that means for consumers is something which we're really definitely focused on. And not try to do everything.

Dave: It's really just going back to the foundations of the business.

Dave: But we also have some things that have been working out and being prudent for us like our own Stoppable collection.

Speaker Change #107: It's getting behind when we got sharing located that'll be competing this weekend in the marathon wearing our.

Kevin Plank: On the last call, I think we did a good job laying out the importance of product story and region and those three things working. We've also done a good job as part of the presentation that we took, you know, really around the world to our key partners and teammates, etc. And, you know, we told them that what's critical for Under Armour to do is to make sure that, you know, we're bringing in a talent.

Speaker Change #107: Velocity elite.

Dave: Two runner is something which is incredible to slip speed program is something that we're going to get back behind but we want to make sure that under armour is and just selling a brand on a T shirt. It's not just the logo it needs to be more and so contextualize what that means for consumers is something which we're really definitely focused on.

Dave: Not trying to do everything we're not trying to boil the ocean. So we want to be incredibly deliberate.

Kevin Plank: We're not trying to boil the ocean, so we want to be incredibly deliberate and specific with the products that we're going after and making sure that we're doing a great job of articulating the story as to why there are performance benefits because that's the thing for me that as I've had to sit and maybe watch the business from a distance, it's something where I'm looking and saying the unleash that we have and the ability to articulate the incredible stories of the powers of the fabrics, the moisture management, the compression, the regenerative capabilities that are in things like UA Rush or Vanish as we call it today, these are the opportunities that we have. So every Under Armour product is something which is special and unique, and I feel like we're going to make sure that we get credit for that. That's really great.

Kevin Plank: And I think if you look at, you know, the way that this table has evolved, the executive leadership team table has evolved, you know, over the last, frankly, you know, eight to ten months, it's pretty significant. And, you know, product was a metaphor that I used to describe as where, you know, we brought in some, you know, A-plus talent between John Barbados, you're on white, and of course, you're seeing who's heading that function up.

Dave: And specific with the products that we're going after and making sure that we're doing a great job of articulating the story as to why the performance benefits because that's the thing for me that is.

Speaker Change #103: It had to sit and sort of maybe watch the business from a distance.

Dave: It's something where I'm looking at saying the unleash that we have and the ability to articulate the incredible stories of the powers of the fabrics the moisture management.

Kevin Plank: But what makes them so powerful is the fact that they're joining a team of leaders of partners that we already have here in the business of Dan LaRera's 13 years, Kyle Blakely 15 years, Jeanette Robertson, who's another, you know, dozen years at UA. You know, we just have this, you know, a real depth, I think, of talent. And so I feel the same way of, you know, of the impetus of someone like an Eric joining our business of being able to balance out that troika of product story and region of what we can do from a storytelling standpoint.

Dave: <unk> the regenerative capabilities that are in things like UA rush or vanish as we call. It today.

Dave: These are the opportunities that we have so every under armour product is something which is special and unique and I.

Dave: I feel like we're going to make sure that we get credit for that.

Kevin Plank: That's exciting. Dave, any thoughts on the units versus price in the guide? And then, if I can also just throw one more, looking at what you repurchased this quarter, how are you thinking about the approach to buybacks, just given where the stock is? Seems like you're retaking brand control and recognizing the cash.

Speaker Change #123: That's really great that's exciting Dave any thoughts on units versus price in the guide and then just if I can also just throw a mark.

Speaker Change #113: At what you repurchased this quarter how are you thinking about the approach to buybacks just given where the stock is like Youre Rethinking brand control and recognizing the cash settlement. Thanks, guys sure, Yes, I mean, I think adding on to what Kevin said.

Kevin Plank: And, you know, obviously the biggest need, and I'll come back to marketing in a second. The biggest need that we have is, you know, we need to be aggressive in North America. And I just want to go back to people and being able to reference a partner that I have in someone like Cara Trent, who's leading their force. And so, you're, you're, there's definitely a new mix. But it's something which I think is a formula.

David Bergman: Yeah, I mean, adding on to what Kevin said, from a price-value perspective, we are definitely focusing more on ASP and ASP growth. When you think about the SKU reduction, you know, we are trying to target a little bit more reduction in kind of the good-level product and protect and really be able to invest in kind of the better and best-level products, all at the same time that we're, you know, working our way out of some of the deeper discounting and promotions, especially within North America e-com.

Speaker Change #103: From a price value perspective, we are definitely focusing more on the ASP and ASP growth.

Speaker Change #103: When you think about the SKU reduction we are trying to target a little bit more reduction in kind of the good level product and protect and really be able to invest in kind of the better and best level product.

Kevin Plank: So we're just, we're stabilizing the business for being consistent with the strategy right now. And frankly, after, you know, a very, probably too long of a time and extended period of time of the ability to bring in, you know, a professional like Eric. You know, my priorities when, you know, getting Eric here was number one, just landed a plane with someone who was, you know, such a terrific A plus talent from the industry.

Speaker Change #103: All at the same time that we're working our way out of some of the deeper discounting and promotions, especially within North America E. Com. So when you kind of bring that whole equation together that should lead to driving continued gross margin expansion, which we think is super important for the brand and for the overall business. So that is part of that strategy that comes.

David Bergman: So, when you kind of bring that whole equation together, you know, that should lead to driving continued gross margin expansion, which we think is super important for the brand and for the overall business. So, that is part of that strategy that comes into play and trying to make sure that we're balancing relative to SKU development and higher-margin product versus lower-margin product, and also how that plays into segmentation and continuing to kind of step forward better and better in how we segment, which we've taken some good strides in the last year or two, but, you know, there's still some more room to go there as You know, relative to the share buyback program, obviously, we are pleased to have the new $500 million program set up. We executed on $40 million of that in Q1.

Kevin Plank: But it was also thinking about how we could get him horizontal as quickly as possible. And so that's why the role of marketing is something that will really, I think, is the unlock for the brand. The terrific products are important, but I do feel like we're a company that's been, you know, left more to just selling on the logo and a price tag next to it versus articulating the actual depth of story that we have available, you know, about each incredible product that we build.

Speaker Change #103: In the play.

Dave: And trying to make sure that we're balancing.

Dave: Relative to the SKU development and the higher margin products versus lower margin product and also how that plays into segmentation and continuing to kind of step step forward better and better in how we segment, which we've we've taken some good strides in the last year or two but.

Dave: Still some more room to go there as well.

Kevin Plank: So, you know, we're a company that spent, you know, half a billion dollars will be spending half a billion dollars in marketing, you know, just last year and this year. And I'm not sure that that's felt. And so there's a tremendous opportunity for us to go attack our 16 to 24 year old varsity athlete consumer and do it in a very authentic way. We spent a lot of time just focused on the gym.

Dave: Relative to the share buyback program. Obviously, we are pleased to have the the new $500 million program set up we executed on $40 million of that in Q1 and.

David Bergman: And, you know, understanding that we've had some pretty big cash outflows recently with the settlement and paying down the convertible debt, we are continuing to kind of look at our future cash flow and making sure that we've got the war chest that we want to continue to protect for any kind of curves in the road, you know, as we had to deal with recently, or, you know, being able to invest in new ideas and new talent and new experiences similar You know, I don't know that we're going to pursue the share buyback in a huge way this year, but we are going to continue to evaluate it each quarter and make moves as prudent, especially with, you know, thinking about where the stock price is right now. Great Thanks a lot, guys. Best of luck for the rest of the year.

Dave: Understanding that we've had some pretty big cash outflows recently with the settlement.

Kevin Plank: And while that's important, we want to be focused on the field. We want to articulate our story, you know, through that voice and the products that will come from it. It's not just the time for these athletes are on the field either. But it's really focusing on the two and from on what sportswear can mean for us because I believe the opportunity for UA is different in sportswear than it maybe it is for other brands. But the way that we're going to convey that story is going to be a little bit different. We're going to do it through the authenticity that we have on the field court and pitch. Thank you.

Dave: And paying down the convertible debt.

Dave: We are continuing to kind of look at our future cash flow and making sure that we've got the war chest that we want to continue to protect for any kind of curves in the road.

Dave: As we had to deal with recently or being able to invest in new ideas and new talent and new experiences.

Dave: Similar to the recent unless acquisition that we're working through so.

Dave: I don't know that.

Dave: We're going to pursue the share buyback in a huge way this year, but we are going to continue to evaluate it each quarter and make moves as prudent especially with.

Simeon Siegel: Our next question will come from Simeon Siegel with BMO Capital Markets. You may now go ahead. Thanks, everyone.

Dave: Thinking where the stock prices right now.

Simeon Siegel: Good morning. Hope you can have a nice summer. So, Kevin, nice to see the first step in the brand renovation.

Speaker Change #157: Great. Thanks, a lot guys best of luck for the rest of year.

Speaker Change #109: Thank you. Thank you.

Kevin Plank: Just when you think through the North America resets, and that 25% few reduction you mentioned, could you elaborate a little bit more on how that plays in terms of reducing specific categories to explore its retail partners price points just you alluded to it, but maybe any more thoughts on how you're going to approach that would be helpful. And just as you think about that reduction, how are you thinking about units versus price expectations within the revenue guide?

Geoff Lowery: Thank you. Our next question will come from Geoff Lowery with Redburn. You may now go ahead. Yeah, afternoon team. I appreciate that the US is your main focus at the moment, but could you talk a little bit more about and the performance of the brand in the A and A. How much is the market versus your own reset?

Speaker Change #128: Our next question will come from Josh <unk> with Redburn you May now go ahead.

Josh <unk>: Yeah maintained I appreciate that the U S. As youll remain tight to sit at the moment, but could you talk a little bit more about the performance of the brand in <unk>.

Dave: Hey.

Kevin Plank: Thank you. Thanks, Simeon. I think we're going to be really thoughtful. As I said in my prepare remarks, this isn't going to be just one fell swoop. We're going to be thoughtful. We're going to be strategic and surgical with where we decide to make tremors, but frankly, the idea of the 25% skewer reduction, it's as much of a metaphor for the organization today. There's not a person in the world who doesn't feel like they've got too much on their plate, so the ability to remove 25% of the work is an ambition for the team.

Speaker Change #121: APAC on how much is market since you will reach that type of activity in those regions. Thank you.

Kevin Plank: [inaudible] Thank you very much. We'll start with Europe, where we have a, you know, sort of Under Armour long term partnership with Kevin Ross, who's now running that business for us. And so it's someone who's a vet, who's worked here in the States and, obviously, been over in Europe now, but just took over as recently as January or February of this year. But I think we're doing a really good job.

Speaker Change #120: Okay. Thank you very much.

Speaker Change #111: We'll start with Europe, where.

Speaker Change #120: We've got a sort of.

Speaker Change #156: And under armour.

Kevin Ross: Long term and Kevin Ross Who's now running that business for us and so it's someone who has a bad who's worked here in the states and obviously been over in Europe, now, but just took over.

Dave: As recently as January and February of this year.

Dave: But I think we're doing a really good job number one we came from a good base in EMEA is probably our strongest region from a momentum standpoint, particularly in the U K.

Kevin Plank: Number one, we came from a good base, and May is probably our strongest region from a momentum standpoint, particularly in the UK. And, you know, timely enough, actually, in France, and Paris were, you know, sort of an underground favorite with what's happening at the Olympics right now.

Kevin Plank: And with that, you're reducing everything from factory visits to you know, lab dip approvals and all the other work and basis that comes with it. But, you know, as we've said, you know, to be an underarmor product, that's got to be a process, and that has to be something which has to be vetted and gone through in a way which is it needs to be special. It can't just be another t-shirt or, you know, another shoe.

Dave: Timely enough actually in France in Paris, where sort of an underground favorite.

Dave: With what's happening the Olympics right now but.

Kevin Plank: But there's there's work to be done. I think we're doing a good job playing to the size of the business that we are. You know, we crossed a billion dollars in the past year, and that's something which gives us some size and scale. And what we're doing is we're doing it through the lens of authenticity, you know, on the pitch. We've got some, you know, incredible athletes like Tony Rudiger. We've got a great kid named Furman Lopez, as I spoke about, who's on the Spanish national team and will be competing against France in the final there.

Dave: But there's work to be done I think we're doing a good job playing to the size of the business that we already know we crossed a $1 billion in.

Kevin Plank: It needs to be a true piece of performance product that actually helps make you better. And what we haven't done is we haven't done a good enough job, I believe, you know, communicating that. And so ensuring that as we say in our vision statement, it provides you with performance products you never knew you needed and once you try them can't imagine living without bills like the, you know, an opportunity that we need to get behind.

Dave: In the past year, and that's something which gives us some size and scale and what we're doing is we're doing it through the lens of authenticity of on the pitch.

Dave: We've got some incredible athletes like Tony Ruediger, we've got a great kidney firm and Lopez as I spoke about is on the Spanish national team will be competing against France, and the final there and Theres really a lens I think that we're doing are really targeted approach in both men's and women's football on the pitch and we're also staying really close to our partnerships J D in sports.

Kevin Plank: So I think it really becomes simple too, I mean, is that we're going to focus on our base layer compression product. You know, it's really just going back to the foundations of the business. But, we also have some things that have been working out and being proven for us like our unstoppable collection. It's getting behind when, you know, we've got Sharon Locati that will be competing this weekend in the marathon wearing our velocity elite two runners is something which is incredible.

Kevin Plank: And there's really a lens, I think, that we're doing a really targeted approach in both men's and women's football on the pitch. And we're also staying really close to our partnerships. J.D.

Kevin Plank: and sports director, incredibly important to us. And as we see our growth, so wholesale is important, but we also expect to grow our TTC business. And we're investing in this, you know, accordingly and for the long term. You know, it's an evolution of a quality story, not unlike what we've learned here in the U.S. We're applying some of the lessons of what we saw happen in the U.S., where we're not crazy about where we are right now in North America.

Dave: Direct are incredibly important to us.

Dave: As we see our growth and so the wholesales important.

Dave: But we also expect to grow our DTC business and we're investing in this accordingly and longer term.

Speaker Change #125: It's an evolution of our quality story not alike. We've learned here in the U S.

Kevin Plank: The slip speed program is something we're going to get back behind. But, we want to make sure that underarmors and just selling, you know, a brand on a t-shirt. It's not just the logo. It needs to be more. And so contextualizing what that means for consumers is something which, you know, we're really definitely focused on and not trying to do everything. We're not trying to boil the ocean. So we want to be incredibly deliberate and specific with the products that we're going after and making sure that we're doing a great job of articulating the story as to why their performance benefits because that's the thing for me that I've, you know, had to sit and sort of, you know, maybe watch the business from a distance.

Dave: We're applying some of the lessons of what we saw happen in the U S, where we're not crazy about where we are right now in North America and so on.

Kevin Plank: And so we are doing a pretty good job, I think, applying the lessons of how do we make sure we can, you know, advance ourselves with what we do in Europe? And so I think we're being really patient with the business, which is why you're not seeing maybe a bigger accelerator. There is that we weren't we're going to be a little more cautious and make sure, number one, aware of the macro environment, but really looking for quality from a long-term standpoint. In APAC, it's it's a little bit more complicated.

Dave: We are doing a pretty good job I think applying the lessons of how do we make sure we can advance ourselves with what we do.

Dave: In Europe, and so I think we're being really patient with the business, which is why youre not seeing maybe a bigger accelerator. There is that we werent, we're gonna be a little more cautious and make sure number one aware of the macro environment, but really looking for quality and from a long term standpoint.

Dave: In APAC it's.

Dave: It's a little bit more complicated is it obviously, it's a it's a massive region with it.

Kevin Plank: Obviously, it's a massive region with its own climate, frankly, frankly, and something that we're dealing with. But the macro pressures there are something that we're aware of. I was over there in May, and we were back in September working with our leader, Jason Archer, there as well.

Kevin Plank: It's something where I'm looking at saying the unleashed that we have the ability to articulate the incredible stories of the powers of the fabrics, the moisture management, the compression, the regenerative capabilities that are in things like UA rush or vanishes we call today. You know, these are the opportunities that we have. So every underarmor product is something which is special and unique. And I feel like we're going to make sure that we get credit for that. That's really great.

Dave: One climate, frankly, frankly, and something that we're dealing with but the macro pressures there or something that we're aware of.

Dave: I was over there.

Dave: In may and will be back in September working with our leader, Jason Archer there as well.

Kevin Plank: This region just requires a little more attention from the home office. So we're looking at how we can be more helpful to lean into our APAC business. You know, from a size and scale standpoint, just to remind everyone on a global basis, Undermer has more than one thousand nine hundred stores around the world. The majority of these are in Asia, and the majority of those are, you know, in China.

Dave: Region, just requires a little more attention from the home office. So we're looking at how we can be more helpful to lean into our APAC business.

Dave: From a size and scale standpoint, just to remind everyone on a global basis under armour has more than 1900 stores around the world. The majority of these are in APAC. The majority of those are in China, but that's why we're gonna excited to get stuff in Korea back on tour in September which will be hopefully a bit of a fuse for getting the region going or at least we're mining.

David Bergman: That's exciting. Dave, any thoughts on the unit versus price in the guide? And then just if I can also just throw a more looking at what you repurchase this quarter, how are you thinking about the approach to buybacks just given where the stock is? It seems like you're re-taking brand control and recognizing the cash. Thanks, gentlemen. Thanks, guys. Sure. Yeah, I mean, I think, you know, adding on to what Kevin said, from a price value perspective, you know, we are definitely focusing more on ASP and ASP growth.

Kevin Plank: But that's why we're excited to get Stephen Curry back on tour in September, which will be, you know, hopefully, a bit of a fuse for getting the region going or at least reminding people that we're there. But there's a lot to cut through from not only the global brands but the local brands. So it's a little bit, little bit different. And beyond China, you know, I think that the macro is something that we're just watching the consumer and some of the softening there. Some of the other regions of what's happening in Japan or South Korea are a bit complicated from an economic standpoint or a macroeconomic standpoint there.

Dave: People that were there, but theres a lot to cut through from not only the global brands, but the local brands, so, it's a little bit little bit different and beyond China.

David Bergman: When you think about the skewer reduction, you know, we are trying to target a little bit more reduction in kind of the good level product and protect and really be able to invest in kind of a better and best level product. All at the same time that we're, you know, working our way out of some of the deeper discounted planning and promotions, especially within North America e-commerce. So when you kind of bring that whole equation together, you know, that should lead to driving continued gross margin expansion, which we think is super important for the brand and for the overall business.

Dave: I think that the macro is something with where we're just watching the consumer and some of the softening there.

Dave: Some of the other regions of whats happening in Japan or <unk>.

Dave: South Korea is a bit complicated from an economic standpoint, or a macroeconomic standpoint there.

Kevin Plank: But, you know, we think our opportunity is large. And, you know, APAC is going to be a massive unlocked force, too. So hopefully, that gives you a little bit of color. That's great. Thank you so much.

Dave: We think our opportunity is large and.

Dave: APAC is going to be a massive unlock for us too. So hopefully that gives you a little bit of color.

Speaker Change #119: That's great. Thank you so much.

Speaker Change #119: Thank you.

David Bergman: So that is part of that strategy that comes into play and trying to make sure that we're balancing relative to the skew development and the higher margin product versus lower margin product and also how that plays into segmentation and continuing kind of step forward. Better and better and how we segment, which we've we've taken some good strides in the last year or two, but you know, there's still some more room to go there as well.

Jim Duffy: Our next question will come from Jim Duffy with Stifel. You may now go ahead. Thank you. Good morning. Hi Dave.

Dave: Our next question will come from Jim Duffy with Stifel. You May now go ahead.

Kevin Plank: Hi Kevin. Good morning, Jim. I want to talk about... Some of the management hires, you've added a lot of great talent, Eric, a great addition to the team, Kevin, the title of EVP of Brand Strategy, that suggests a lot of responsibility overlap with your historical areas of focus. Can you maybe speak to your vision for the partnership with Eric? Clearly, this was part of the discussion during the recruitment process. And then, with Eric on board, where do you expect to be spending more of your time? Yeah, thank you. You know, it's not like that.

Jim Duffy: Hi, Thank you good morning, Hi, Dave Hi, Kevin.

Jim Duffy: Good morning, Jim I wanted to talk about.

Speaker Change #135: So the management hires you've added a lot of great talent Erika Great addition to the team.

David Bergman: You know, relative to the share buyback program, you know, obviously, we are pleased to have the new 500 million program set up. We executed on 40 million of that in Q one and, you know, understanding that we've had some pretty big cash outflows recently with with the settlement and paying down the convertible debt. You know, we are continuing to kind of look at our future cash flow and making sure that we've got the war chest that we want to continue to protect for any kind of curves in the road, you know, as we had to deal with recently or, you know, being able to invest in new ideas and new talent and new experiences similar to the recent on less acquisition that we're working through.

Speaker Change #163: Kevin the title of EVP of brand strategy that suggests a lot of responsibility overlap with your historical areas of focus can you maybe speak to your vision for the partnership with Eric Clearly this was part of the discussion during the recruitment process and then with Eric on Board, where do you expect to be spending more of your time.

Kevin Plank: Thanks, Jim. It doesn't feel too different than, you know, it's maybe a little bit of free bird, but building the brand the first time, you never really focused on sort of complementing skill sets as much as you said, "If you can get a pro, I'm a pretty good generalist." So I have the ability to plug into other places and, you know, bring in a professional like Eric, who is, you know, he's got, he's a multidisciplinary expert as well.

Kevin Plank: Yes. Thank you thanks, Jim it doesn't feel to different then.

Speaker Change #122: It's maybe a little bit of free bird, but building the brand and the first time.

Speaker Change #122: You've never really focused on on sort of complementing skill sets as much as you said if you can get a pro I'm a pretty good generalists. So I got the ability to plug other places and bringing a professional like Eric on who he's got he's a multidisciplinary expert as well, but with having his focus over marketing and frankly our strategy work.

David Bergman: So, you know, I don't know that we're going to pursue the share buyback in a huge way this year, but we are going to continue to evaluate it each quarter and make moves as prudent, especially with, you know, thinking where the stock price is right now. Great. Thanks a lot, guys.

Kevin Plank: But with having his focus on marketing, and frankly, our strategy work, as I said, is a way to get Eric horizontal in the organization so that he can have that impact. And where I think our biggest need is right now is really in that product, region, and story balance. And we just haven't had that, I think that strength of leadership that's required for us to be successful. So Eric is going to be leaning in there and responsible for building that out. And I'm not lost on what that is going to mean for me because there's plenty of other things to do.

Speaker Change #122: As I said as a way to get Eric horizontal in the organization that you can have that impact and where I think our biggest need is right now is.

Speaker Change #122: Is really in that product.

David Bergman: Best luck for the rest of the year. Thank you.

Speaker Change #122: Region and story balance and we just we haven't had that I think that strength.

Jeff Lowery: Our next question will come from Jeff Lowry with Redburn. You may now go ahead. Yeah, after no team, I appreciate that the US is your main focus at the moment, but could you talk a little bit more about the performance of the brand in and the A and APAC and how much is market versus your own reset activity and those regions. Thank you. Thank you very much.

Kevin Plank: Of leadership, that's required for us to be successful so.

Speaker Change #156: Eric is going to be leaning in there and responsible for building that out and I'm not lost on what is that going to mean for me because theres plenty of other things to do.

Kevin Plank: And that's where I think it is my job to make sure that I'm leveling up. Let me just give a little color on the acquisition. But, you know, getting Eric here is that it will continue to be its own independent organization for us.

Kevin Plank: And that's where I think it is my job is to make sure that im leveling up let.

Speaker Change #118: Let me just give a little color on the acquisition, but.

Speaker Change #125: Getting Eric here is that unless will continue to be its own independent organization for us.

Kevin Plank: We'll start with Europe where we've got a sort of an underarm or long term in Kevin Ross, who's now running that business force. And so it's someone who's a vet who's worked here in the States and obviously been over in Europe now, but just took over as recently as January or February of this year. But I think we're doing a really good job, number one, we came from a good base and May is probably our strongest region from a momentum standpoint, particularly in the UK and, you know, timely enough, actually in France and Paris were, you know, sort of an underground favorite with what's happening at the Olympics right now.

Speaker Change #124: I think bringing in sort of the ESG approach that they have with plant based regenerative fashion is something that is something which is a priority in the organization and Eric of course will help us articulate that.

Kevin Plank: And, you know, I think bringing in sort of the ESG approach that they have with plant-based regenerative fashion is something that is something that is a priority in the organization. And Eric, of course, will help us articulate that. But I think what we want to do is make sure that the largest need that we had was just getting someone who can be the partner to Yassine and to Kara. You know, decision rights and the operating model are one of the things that always come up.

Speaker Change #141: But I think what we want to do is to make sure that the largest need that we had was just getting someone who can be their partner <unk> seen into Kara decision rights and the operating model is one of the things that always comes up and one of the things that Eric specifically did.

Speaker Change #141: At Audi <unk>.

Eric Litkey: Back in 13 or 14, when he took over there which is working on the operating model of how product and and region and.

Speaker Change #118: And marketing all work together, so that'll be a real balance in a real plus for us. So I'm not worried about having things to do just lucky and appreciative that we're able to attract.

Kevin Plank: And one of the things that Eric specifically did, you know, at Ady back in 13 or 14, when he took over there, was just working on the operating model of how product and and region and and and marketing all work together. So that'll be a real balance and a real plus for us. So I'm not worried about having things to do. I'm just lucky and appreciative that we're able to track someone like Eric.

Kevin Plank: But there's there's there's work to be done. I think we're doing a good job playing to the size of the business that we are. You know, we crossed a billion dollars in the past year, and that's something which gives us some size and scale. And what we're doing is we're doing it through the lens of authenticity of, you know, on the pitch. We've got some, you know, incredible athletes like Tony Rudiger.

Kevin Plank: So I think it's the beginning of many more to come. But I've got to tell you just one thing, maybe on a personal level, which is that it feels like there's definitely something a bit new and a bit of a shift. And so we're not declaring victory. We're not beating our chests for sure.

Eric Litkey: Someone like Eric So I think it's the beginning of many more to come but.

Speaker Change #125: I've got to tell you just one thing maybe on a personal level. It just it feels like there's definitely there's something a bit of new and a bit of a shift and so we're not declaring victory were not beating our chests for sure, but we've got a lot of work to do but we like the direction that we're heading in right now.

Kevin Plank: We've got a great kid named Ferman Lopez, as I spoke about, is on the Spanish national team will be competing against France in the final there. And there's really a lens, I think, that we're doing a really targeted approach in both men's and women's football on the pitch. And we're also staying really close to our partnerships, JD and sports director and incredibly important to us. And as we see our growth and so wholesale is important, but we're also expected to grow our TTC business.

Speaker Change #125: Great. Thanks for that and then Dave just a quick one on the DTC margins can you remind us when you'll anniversary the less promotional approach in DTC and get to more normalized comparisons on the DTC margins.

Dave: Yeah, that's a great question I mean generally speaking.

Kevin Plank: And we're investing in this, you know, accordingly, in longer term, you know, it's an evolution of a quality story, not unlike we've learned here in the US. We're applying from the lessons of what we saw, you know, happen in the US where we're not crazy about where we are right now in North America. And so we're, we are doing a pretty good job. I think applying the lessons of how do we make sure we can, you know, advance ourselves with what we do in Europe.

Dave: It'll continue to be a benefit for us through the year, a little bit bigger than the front half versus the back half and then as we step out of this fiscal year, we should be more on a comparable basis relative to.

Dave: The E com gross margins promotion levels as we've been kind of chipping away to get to a really nice healthy level by the end of this fiscal year.

Kevin Plank: And so I think we're being really patient with the business, which is why you're not seeing maybe a bigger accelerator there is that we weren't, we're going to be a little more cautious and make sure, number one, aware of the macro environment, but really looking for quality from a long term standpoint.

Dave: And we're continuing to kind of test on the factory house side, which could be something that we play into more to continue to become more premium as we step into fiscal 'twenty six.

Kevin Plank: But we've got a lot of work to do, but we like the direction that we're heading in right now. Great. Thanks for that.

Dave: Thank you guys.

Kevin Plank: In APAC, it's a, it's a little bit more complicated is it, obviously, it's a, it's a massive region with, with its, its own climate, frankly, frankly, and something that we're dealing with. But the macro pressure there is something that we're aware of. I was over there in, in May, and we back in September, working with our leader Jason Archer there as well. This region just requires a little more tension from the home office.

Jim Duffy: Youre welcome Jim.

David Bergman: And then, Dave, just a quick one on the D to C margins. Can you remind us when you'll anniversary the less promotional approach in D to C and get to more normalized comparisons on the D to C margins? Yeah, it's a great question.

Dave: Our next question will come from Paul <unk> with Citi. You May now go ahead.

Paul: Hey, Thanks, guys just wanted to ask a question on your guidance update.

Paul <unk>: Updated the full year, you gave third quarter I just wanted to make sure I heard correctly I think you said 110 to $1 20.

Paul <unk>: EBIT.

Kevin Plank: So we're looking at how we can be more helpful to lean into our, our APAC business. You know, from a size and scale standpoint, just to remind everyone on a global basis, Unurmer has more than 1,900 stores around the world. The majority of these are an APAC, the majority of those are, you know, in China. But that's why we're going to excited to get Steph and Curry back on tour in September, which will be, you know, hopefully a bit of a fuse for, you know, getting the region going or at least reminding people that we're there.

Speaker Change #128: It would imply.

Speaker Change #128:

Speaker Change #141: Large percentage of the full year coming from first half much smaller from the second half. So just wanted to understand what your outlook.

Speaker Change #145: Can have both from a gross margin and SG&A perspective that would lead to.

Speaker Change #134: Pretty weak numbers I think in the second half based on the guidance if I heard it correctly and then just separately on the factory business. I think you mentioned mixed results. When you adjusted prices. If you could just talk about what you saw as you move prices around and what the ultimate plan for the factory business in terms of number of stores and what role.

Kevin Plank: But there's a lot to cut through from not only the global brands, but the local brands. So it's a little bit, little bit different. And beyond China, that, you know, I think that the macro is something which we're just watching the consumer and some of the softening there. Some of the other regions of what's happening in Japan or South Curry is a bit complicated from an economic standpoint or macro economic standpoint there.

Speaker Change #134: That served within the company.

David Bergman: I mean, generally speaking, you know, it'll continue to be a benefit for us through the year, a little bit bigger in the front half versus the back half. And then as we step out of this fiscal year, we should be more on a comparable basis relative to, you know, the e-com gross margins and promotion levels as we've been, you know, kind of chipping away to get to a really nice healthy level by the end of this fiscal year.

Speaker Change #141: Sure Paul when you think about kind of front half versus back half a couple of things come into play there.

Speaker Change #141: First of all when you think about Q1.

Kevin Plank: But, you know, we think our opportunity is large and, you know, APAC is going to be a massive unlock force too. So hopefully that gives you a little bit of color. That's great. Thank you so much. Thank you.

Speaker Change #128: And that overdrive, and then what does that mean for the full year.

Speaker Change #128: Again keep in mind that in the back half we are expecting a little bit more developing APAC revenue pressure, we're also expecting a little bit higher ocean freight costs than we originally planned there's also been some increasing FX pressure.

Jim Duffy: Our next question will come from Jim Duffy with Diffle. You may now go ahead. Thank you. Good morning. Hi, Dave. Hi, Kevin. Good morning, Jim.

Speaker Change #128: And there's a little bit of caution that we have as well just when you think about kind of the recent economic trends.

Jim Duffy: I want to talk about some of the management hires. You've added a lot of great talent. Eric, a great addition to the team. Kevin, the title of EVP of Brand Strategy, that suggests a lot of responsibility overlap with your historical areas of focus. You may be speaking to your vision for the partnership with Eric. Clearly, this was part of the discussion during the recruitment process. And then with Eric on board, where do you expect to be spending more of your time?

Speaker Change #128: But in general from an operating income perspective, historically, we've definitely run.

Speaker Change #128: Higher amounts in the first half of the year and a little bit lower in the back half of the year. Some of that if you think about Q2, that's historically a high revenue dollar quarter for us and it's also generally a higher gross margin percentage quarter for us so driving bigger gross margin dollars in Q2 as is kind of a historical trend for us.

Speaker Change #128: And then that higher front half profitability is also kind of amplified this year by the planned insurance recovery relative to legal invoices paid prior to this year that I mentioned and also shifting some of our planned marketing spend out of Q3 and Q4.

Jim Duffy: Yeah, thank you. It doesn't feel too different than it may be a little bit of free bird, but building the brand in the first time. You never really focused on complementing skill sets as much as you said. If you can get a pro, I'm a pretty good journalist. So I got the ability to plug other places and, you know, bring in a professional like Eric on who, you know, he's got he's a multidisciplinary expert as well.

Speaker Change #128: And maybe the last thing I would mention there is back half forecast also carries more incentive compensation compared.

Speaker Change #128: Compared to the prior year back half, where we were adjusting down Unfortunately, and reversing some of that incentive compensation that was recorded in earlier quarters last year. So when you add all those factors together it points to the front half being a substantial portion of our full year operating income, which is how we have things laid out in the plan.

Jim Duffy: But with having his focus over marketing and frankly, our strategy work, as I said, is a way to get Eric Corazon on the organization that he can have that impact. And where I think our biggest need is right now is really in that product region and story balance. And we just we haven't had that, I think that strength of leadership that's required for us to be successful. So Eric is going to be leaning in there and responsible for building that out.

Speaker Change #128:

David Bergman: You know, and we're continuing to kind of test on the factory house side, which could be something that we play into more to continue to become more premium as we step into fiscal 26. Thank you, guys. You're welcome.

Speaker Change #128: And on your second question relative to factory House, I would say that we did step into testing some some lower promotion levels and less promotion levels.

Speaker Change #128: And we actually Havent really planned on doing that but as we stepped into that more deeply in E. Com and we're excited about the results. There on E. Comm, we decided to start testing that a little bit on factory house, and I would say that it.

Jim Duffy: And I'm not lost on what is that going to mean for me because there's plenty of other things to do. And that's where I think it is my job is to make sure that I'm leveling up. Let me just give a little color on the acquisition, but, you know, getting Eric here is that unless we'll continue to be its own independent organization force. And, you know, I think bringing in sort of the ESG approach that they have with plant-based regenerative fashion is something that is is something which is a priority in the organization and Eric of course will help us articulate that.

Speaker Change #128: It was both the price level the depth of the discount and the results were really kind of mix to be honest.

Speaker Change #128: We're experimenting we're learning we're seeking balance we.

Speaker Change #128: We did give up a little bit of revenue when we were doing that and so we're continuing to kind of test and learn on the factory outside but right now I would say that the results from that are mixed and we've got some more work to do.

Jim Duffy: But I think what we want to do is make sure that the largest need that we have is just getting someone who can be the partner to you seen and to Kara. You know, decision rights and the operating model is one of the things that always comes up and one of the things that Eric specifically did at Audi back in 13 or 14 when he took over there. Which is working on the operating model of how product and region and and and and marketing all work together.

Speaker Change #159: Thank you good luck.

Paul Lejuez: Our next question will come from Paul Lejuez with Citi. You may now go ahead. Hey, thanks guys. I just wanted to ask a question on your guidance. You updated the full year, and you gave the third quarter. I just wanted to make sure I heard correctly.

Paul <unk>: Thanks, Paul.

Speaker Change #128: Our next question will come from Laura followed suit.

Speaker Change #156: With Dnb Roberts you May now go ahead.

David Bergman: I think you said 110 to 120, and that would imply a pretty large percentage of the full year coming from the first half, much smaller from the second half. I just want to understand what your outlook is for the second half, both from a gross margin and SG&A perspective, which would lead to some pretty weak numbers, I think, in the second half, based on the guidance, if I heard it correctly. And then, just separately on the factory business, I think you mentioned mixed results when you adjusted prices.

David Bergman: If you could just talk about what you saw as you moved prices around and what the ultimate plan is for the factory business in terms of the number of stores and what role that serves within the company. Thanks.

Laura: Good morning. Thank you very much for taking my question, Dave I wanted to ask.

Laura: For the guidance should we still assume wholesale down low double digits in DTC down 10% for the year and then with E Commerce.

Jim Duffy: So that'll be a real a real balance and a real plus for us. So I'm not worried about having things to do. I'm just lucky and appreciative that we were able to track someone like Eric. So I think it's the beginning of many more to come.

Speaker Change #157: Down 25%.

Speaker Change #137: Is that the right way to think about it going forward is there are there any lessons learned that you think you can apply to the rest of the business from the pullback in promotions in ecommerce.

Kevin Plank: But I've got to tell you just one thing maybe on a personal level, which is it feels like there's definitely there's something a bit of new and a bit of a shift. And so we're not declaring victory. We're not beating our chest for sure. But we've got a lot of work to do, but we like the direction that we're heading in right now.

David Bergman: Great. Thanks for that.

David Bergman: When you think about kind of the front half versus the back half, a couple things come into play there. You know, first of all, when you think about Q1 and that overdrive, and then, you know, what does that mean for the full year? Again, keep in mind that, you know, in the back half, we are expecting a little bit more revenue pressure from developing APAC revenue pressure. We're also expecting a little bit higher ocean freight costs than we originally planned.

Speaker Change #170: Sure, Yes, I would say that on full year. We start we still are looking at wholesale down kind of a low double digit percentage kind of in that 10% to 12% range.

David Bergman: And then Dave, just a quick one on the D to C margins. Can you remind us when you'll anniversary the less emotional approach in D to C and get to more normalize comparison on the D to C margins. Yeah, that's a great question. I mean, generally speaking, you know, it'll continue to be a benefit for us through the year, a little bit bigger in the front half versus the back half. And then as we step out of this fiscal year, we should be more on a comparable basis relative to, you know, the ECOM gross margin, the promotion levels as we've been, you know, kind of chipping away to get to a really nice healthy level by the end of this fiscal year.

Speaker Change #137: And then DTC being down approximately 10% or so and that is mainly driven by our decisions to kind of reset the brand, especially in North America with the E com pull back on promotions and.

Speaker Change #137: Also an elevated product assortment there.

Speaker Change #137: Relative to E comm specific we're not necessarily giving guidance on that.

Speaker Change #137: But you can you would definitely see that being the over indexed decrease within the DTC being down 10%, so definitely down more than 10% maybe not the full 25 that we saw in Q1 when.

David Bergman: You know, and we're continuing to kind of test on the factor house side. Which could be something that we play into more to continue to become more premium as we step into fiscal 26. Thank you guys. You're welcome. Thank you.

Speaker Change #137: When you think about full year, but again that is intentional most of that is intentional as we continue to drive through those promotional decisions within North America.

David Bergman: There's also been some increasing FX pressure. And, you know, there's a little bit of caution that we have as well, just when you think about kind of the recent economic trends. But in general, from an operating income perspective, historically, we've definitely run higher amounts in the first half of the year and a little bit lower in the second half of the year.

Speaker Change #140: And halo around it maybe I can just.

Speaker Change #145: Let me, let me pile on that too.

Speaker Change #145: Because I think it's really instructive of what happened and what we're able to do through.

Paul Lejuez: Our next question will come from Paul Lejuez with city. You may not go ahead. Thank you guys. Just want to ask a question here, your guidance, you updated the full year, you gave third quarter. I just wanted to make sure I heard correctly. I think you said one 10 to 120. And that would imply, you know, pretty large percentage of the full year coming from the first half much smaller from the second half.

Speaker Change #140: Through the lens of our full price ecommerce website that frankly.

Speaker Change #161: Hasn't been quite as full price a year ago, we're about about 65% of what we were selling a year ago was promotional and about 35% full price and with what we did by reducing significantly reducing promotion days.

Speaker Change #161: We didn't quite inverted, but we made significant progress in terms of getting to promote our full price sales and so what that did as well as not only did it help us with you saw some of the gross margin flow through for ourselves, but also helps the algorithms on our partner websites on the Amazon algorithm that goes around and so you just watch it a general rising vote raise alt a rising tide raises.

Paul Lejuez: So just want to understand what your outlook is in the second half, you both from gross margin. And yesterday, perspective that would lead to, it's a pretty neat numbers. I think in the second half based on the guidance, if I heard it correctly.

David Bergman: And then just separately on the factory business, I think you mentioned mixed results when you adjusted prices, you could just talk about what you saw as you move prices around and what the ultimate plan is for the factory business in terms of numbers stores and what role that serves within the company. Thanks. Sure, Paul, when you think about kind of front half versus back half, a couple of things come into play there.

Speaker Change #140: All boats here so as that's occurring it's something that's pretty instructive as we're thinking about we keep talking about repairing the brand or what we're doing with the brand or how the health of the brand is right now all of those things are top of mind and top on the list of what we're going to do but I think we're starting to see some of the models of the ways that we can invest and it'll actually pay off a return.

Speaker Change #140: For us and so, but we will be applying that again, we don't have all the facts, but we like some of the indications that we're seeing right now we show like driving a more full price business in that 47, five gross margin or something which has been a pretty good indicator for the health of how we're doing.

David Bergman: You know, first of all, when you think about Q1 and that overdrive and then, you know, what does that mean for the full year. Again, keep in mind that, you know, in the back half, we are expecting a little bit more developing APAC revenue pressure. We're also expecting a little bit higher ocean freight costs than we originally planned. There's also been some increasing effects pressure. And, you know, there's a little bit of caution that we have as well, just when you think about kind of a recent economic trends.

Speaker Change #140: Thank you Kevin Yes in fact, the gross margin nice gross margin beat on the first quarter.

Speaker Change #140: Dave I think you mentioned there were three factors.

Speaker Change #173: There are incremental headwinds for the full year I think you've mentioned ocean freight FX and mix from license business. Maybe you can could you for the audience could you kind of bridge that for us.

David Bergman: But in general, from an operating income perspective, historically, we've definitely run higher amounts in the first half of the year and a little bit lower in the back half of the year. Some of that, if you think about Q2, that's historically a high revenue dollar quarter for us. And it's also generally a higher gross margin percentage quarter for us. So driving bigger gross margin dollars in Q2 is kind of a historical trend for us.

Speaker Change #141: Those were in terms of incremental headwinds versus 90 days ago, as we think about the full year guide on the gross margin.

Speaker Change #141: Yes, I mean, I think what I was trying to elaborate on as the main year over year drivers that are behind our full year improvement still are heavily weighted to the favorable pricing with less DTC discounting and also the supply chain benefits related to the improved.

David Bergman: And then that higher front half profitability is also kind of amplified this year by the planned insurance recovery relative to the legal invoices paid prior to this year that I mentioned. And also shifting some of our planned marketing spend out to Q3 and Q4. And, you know, maybe the last thing I'd mentioned there is, you know, back half forecast also carries more incentive compensation compared to the prior year back half where we were adjusting down.

Speaker Change #141: Costing those are the two real big positives on the full year and.

Speaker Change #141: Obviously, we saw a little bit of extra benefit there as we went through Q1.

Speaker Change #141: As we look forward the impact on freight cost is probably the largest kind of newer developing headwind thats kind of taking away some of that Q1 overdrive.

David Bergman: Unfortunately, and reversing some of that incentive compensation that was recorded in earlier quarters last year. So when you add all those factors together, you know, it points to the front half being, you know, a substantial portion of our full year operating income, which is how we have things laid out in the plan.

Speaker Change #141: And then a close second to that would be the foreign currency headwinds that had been developing.

Speaker Change #141: And that we saw during the first three months and that our projected a little bit forward.

Speaker Change #141: The change in mix due to licensing sales and some of the challenged margins on the off price channel, that's a little bit of a smaller <unk>.

David Bergman: And on your second question relative to factory house, I would say that we did step in to testing some lower promotion levels and less promotion levels, and we actually hadn't really planned on doing that, but as we stepped into that more deeply in ECOM and we were excited about the results there on ECOM, we decided to start testing that a little bit on factory house. And I would say that it was both the price level, the depth of the discount, and the results were really kind of mixed to be honest, you know, we're experimenting, we're learning, we're seeking balance, you know, we did give up a little bit of revenue when we were doing that, and so we're continuing to kind of test and learn on the factory outside, but right now, I would say that the results from that are mixed and we've got some more work to do. Thank you, good luck. Thanks Paul.

Speaker Change #141: Developing headwind the first two around freight costs and FX are a little bit bigger.

Speaker Change #158: Okay. Thank you congrats again on the beat and good luck with back to school.

Speaker Change #141: Thank you thanks.

Speaker Change #140: Our next question will come from Sam Poser with Williams trading you May now go ahead.

Sam Poser: Many of my questions have been answered. Thank you guys from taking my question.

Sam Poser: I was wondering just to follow up on the back half guidance.

Paul Lejuez: Some of that, if you think about Q2, that's historically a high revenue dollar quarter for us, and it's also generally a higher gross margin percentage quarter for us. So driving bigger gross margin dollars in Q2 is kind of a historical trend for us. And then that higher front-half profitability is also kind of amplified this year by the planned insurance recovery relative to legal invoices paid prior to this year, as I mentioned, and also shifting some of our planned marketing spend out to Q3 and Q4.

Paul Lejuez: And, you know, maybe the last thing I'd mention there is that the back half forecast also carries more incentive compensation compared to the prior year back half, where we were adjusting down, unfortunately, and reversing some of that incentive compensation that was recorded in earlier quarters last year. So when you add all those factors together, it points to the front half being, you know, a substantial portion of our full-year operating income, which is how we have things laid out in the plan.

Speaker Change #141: When you shoot you said that there is a shift out of marketing spend out of out of Q2.

Paul Lejuez: And on your second question relative to, you know, Factory House, I would say that, you know, we did step into testing some lower promotion levels and lower promotion levels. And we actually hadn't really planned on doing that, but as we stepped into that more deeply in e-com and were excited about the results there on e-com, we decided to start testing that a little bit on Factory House.

David Bergman: I would say that, you know, it was both the price level and the depth of the discount, and the results were really kind of mixed, to be honest. You know, we're experimenting, we're learning, we're seeking balance. You know, we did give up a little bit of revenue when we did that, and so we're continuing to kind of test and learn on the Factory House side. But right now, I would say that the results from that are mixed, and we've got some more work to do. Thank you. Good luck!

Speaker Change #141: We're going to see is that going to go more into Q4, because as sort of the beginning of this setup for where youre anticipating improvements into fiscal 'twenty six.

Laurent Falosucci: Thanks, Paul. Our next question will come from Laurent Falosucci with PNB Paribas. You may now go ahead. Good morning.

David Bergman: Thanks very much for taking my question. Dave, I wanted to ask for guidance. Should we still assume wholesale is down low double digits and DTC is down 10% for the year? And then with e-commerce down 25%, is that the right way to think about it going forward? And are there any lessons learned that you think you can apply to the rest of the business from the pullback in promotion for e-commerce? Sure.

David Bergman: Yeah, I would say that for the full year, you know, we still are looking at wholesale down, kind of a low double-digit percentage, kind of in that 10 to 12 percent range, and then DTC being down approximately 10 percent or so. And that is mainly driven by our decisions to kind of reset the brand, especially in North America with the e-com pullback on promotions and also, you know, an elevated product assortment there. Relative to e-com specifically, we're not necessarily giving guidance on that, but you would definitely see that as the over-indexed decrease within the DTC being down 10 percent. So, definitely down more than 10 percent.

David Bergman: Maybe not the full 25 that we saw in Q1 when you think about the full year, but again, that is intentional. Most of that is intentional as we continue to drive through those promotional decisions within North America. Hey Laurent, maybe I can just pile on that too because I think it's really instructive about what happened and what we were able to do through the lens of our full-priced e-commerce website that, frankly, hadn't been quite as full price a year ago.

Speaker Change #161: Well actually so some of Q1's Bottomline overdrive was.

Laurent: Our next question will come from Laurent, follow suit key with the PMB per rep or others. You may now go ahead. Good morning, thanks very much for taking me my question. Dave, I wanted to ask for the guidance, should we still assume wholesale is down low double digits and DTC down 10% for the year, and then with ECOMers down 25%, is that the right way to think about it going forward? And is there any lessons learned that you think you can apply to the rest of the business from the pullback and promotion in ECOMers?

Speaker Change #177: Shifting some of that marketing spend to Q3 and Q4 and then similar with Q2 as well so we are.

Laurent: Sure, yeah, I would say that on full year, you know, we still are looking at wholesale down kind of a low double digit percentage, kind of in that 10-12% range, and then DTC being down approximately 10% or so, and that is mainly driven by our decisions to kind of reset the brand, especially in North America, with the ECOM pullback on promotions, and also, you know, an elevated product assortment there. Related to ECOM specific, we're not necessarily giving guidance on that, but you would definitely see that being the over indexed decrease within the DTC being down 10%.

Speaker Change #141: Back loading a little bit more in the back half on marketing than we originally anticipated in our outlook, but it's not all relative to Q4 I mean, some of it is laying into.

Speaker Change #141: The brand for going into fiscal 'twenty, six and beyond but also making sure that were really supporting.

Speaker Change #141: The back to school and also the holiday sales that are in the holiday sales mainly that are in.

Speaker Change #141: Q3 for us or calendar Q4.

Speaker Change #141: Thank you and then secondly.

Speaker Change #141: Secondly.

Speaker Change #141: Who.

David Bergman: We were about, you know, about 65% of what we were selling a year ago was promotional and about 35% full price, and, you know, with what we did by significantly reducing promotion days, we didn't quite invert it, but we made significant progress in terms of getting to promote our full price sales. And so what that did as well is not only did it help us with, you saw some of the gross margin flow through for ourselves, but it also helped the algorithms on our partner websites with, you know, the Amazon algorithm that goes around. And so you just watch a general rising tide raise all boats here.

Speaker Change #141: Kevin and what you were saying there, they're sort of they're sort of as a combination of.

Speaker Change #166: You mentioned, having patients and having and wanting to do things quickly.

Speaker Change #141: And I guess two questions.

Speaker Change #177: What is the sort of game plan look for turning around and getting North America sort of on the track you want to and you know how are you balancing.

Speaker Change #141: Patients.

Laurent: So definitely down more than 10%, maybe not the full 25 that we saw on Q1 when you think about full year, but again, that is intentional. Most of that is intentional as we continue to drive through those promotional decisions within North America. And, hey, Laurent, maybe I can just, let me pile on that too, because I think it's really instructive of what happened and what we're able to do through the lens of our full price ECOMers website that frankly had been quite as full price a year ago.

Kevin Plank: So as that happens, it's something that's pretty instructive as we're thinking about, you know, we keep talking about repairing the brand or what we're doing with the brand or how healthy the brand is right now. All those things are top of mind and top on the list of what we're going to do. But I think we're starting to see some of the models of the ways that we can invest, and it'll actually pay off in return for us.

Speaker Change #179: Brand speed all of that as you.

Kevin Plank: And so we'll be applying that again. We don't have all the facts, but we like some of the indications that we're seeing right now, and we sure like driving a more full price business and that 47.5 gross margin or something, which is a pretty good indicator for the health of how we're doing. Thank you, Kevin.

Kevin Plank: Yeah, in fact, yeah, the gross margin, nice, nice gross margin beat in the first quarter. Dave, I think you mentioned there were three factors that are incremental to the headwinds for the full year. I think you mentioned, you know, Ocean Freight FX and mix from licensed business.

David Bergman: Maybe could you, for the audience, could you kind of bridge it for us? How much were those in terms of incremental headwinds versus 90 days ago, as we think about the full year guide on gross margin? Yeah, I mean, I think, you know, what I was trying to elaborate on is the main year-over-year drivers that are, you know, behind our full-year improvement are still heavily weighted to favorable pricing with less DTT discounting and also supply chain benefits related to improved product costing.

David Bergman: Those are the two real big positives for the full year. And obviously, we saw a little bit of extra benefit there as we went through Q1. But as we look forward, the impact on freight costs is probably the largest kind of newer developing headwind that's kind of taking away some of that Q1 overdrive. And then a close second to that would be, you know, the foreign currency headwinds that have been developing that we saw during the first three months and that are projected a little bit forward.

David Bergman: The change in mix due to licensing sales and some of the challenge margins on the off-price channel is a little bit of a smaller developing headwind. The first two around freight costs and FX are a little bit bigger.

Speaker Change #170: We look forward.

David Bergman: Thank you. Congratulations again on the beat, and good luck with that. Thank you. Our next question will come from Sam Poser with Williams Trading. You may now go ahead.

Sam Poser: I turned 52 on Tuesday, Sam I've actually been growing and maturing I guess.

Sam Poser: Well, many of my questions have been answered. Thank you guys for taking the time to answer my question. I was wondering, just a follow-up on the back half guidance. When you said that there was a shift out of marketing spend out of Q2, are we going to see... Is that going to go more into Q4 because as sort of the beginning of this setup for where you're anticipating improvements into fiscal 26? Well, actually, some of Q1's bottom line overdrive was, you know, shifting some of that marketing spend to Q3 and Q4, and then similar with Q2 as well.

David Bergman: So we are backloading a little bit more in the back half on marketing than we originally anticipated in our outlook, but it's not all relative to Q4. I mean, some of it is laying into the brand for going into fiscal 26 and beyond, but also making sure that we're really supporting the back to school and also the holiday sales that are in the holiday sales, mainly that are in Q3 for us or calendar Q4. Thank you.

Sam Poser: And then, secondly, Kevin, in what you were saying, there sort of is a combination of... You mentioned having patience and wanting to do things quickly. And I guess the question is, what is the sort of game plan look for for turning around to get North America sort of on the track you want it to? you know, how are you balancing... patient. You know, patient, brand, speed, all of that, as we look forward? I turned 52 on Tuesday, Sam.

Speaker Change #141: Thank you for the happy birthday, I've I've I've been.

Kevin Plank: I've actually been growing and maturing, I guess, you know. I thank you for the happy birthday. I've been. You know, as an entrepreneur, you always feel late. You feel like it's got to be done, you know, tomorrow, and that's something which has been somewhat of a strength. And at times, it can be difficult, especially as you get large and need to scale as an organization. But I think really coming into our own as a business, you know, we were opening this new headquarters, which is beautiful here in Baltimore.

Speaker Change #177: As an entrepreneur you always feel late you feel like it's got to be done tomorrow, and that's something which has been somewhat of a strength and at times it can be.

Speaker Change #140: Difficult, especially as you get larger need to scale as an organization but.

Speaker Change #170: I think really coming into our own as a business. We're opening this new headquarters, which is beautiful here in Baltimore, but I don't know if that's exactly where shareholders would have liked to have some spend money, but this thing is built and it's going to be an incredible edifice for us.

Laurent: We were about, you know, about 65% of what we were selling a year ago was promotional, and about 35% full price, and, you know, with what we did by reducing, you know, significantly reducing promotion days. We didn't quite invert it, but we made significant progress in terms of getting to promote our full price sales. And so, what that did as well is not only did it help us, you saw some of the gross margin flow through for ourselves, but it also helps the algorithms on our partner websites, on, you know, the Amazon algorithm that goes around.

Kevin Plank: And I don't know if that's exactly where shareholders would have liked us to spend money, but this thing is built, and it's going to be an incredible edifice for us that, today, we think is going to be a massive asset for the business. So I think really it's the maturity of just recognizing the hand that we have. And, you know, I've used this analogy of I've had a pair of twos, and we've had a royal flush before. And today, we have neither.

Speaker Change #140: Today, we think it's going to be a massive asset for the business. So I think really it's the maturity of just recognizing the hand that we have in.

Speaker Change #140: <unk>.

Speaker Change #140: Use this analogy of I've had a pair twos and we've had a royal flush before and today, we have neither but we've been able to win with both so I feel pretty good about the hand that we have and just looking at the assets.

Kevin Plank: But we've been able to win with both. So I feel pretty good about the hand that we have and just looking at the assets. And, you know, I've sort of said, you know, we've got 100 things to fix at UA. And, you know, of those 100 things, I'd say probably 70, 75 percent of them are self-inflicted.

Laurent: And so, you just watched a general rising, rising tide result boats here. So, as that's occurring, it's something that's pretty instructive as we're thinking about, you know, we keep talking about repairing the brand, or what we're doing with the brand, or how the healthy the brand is right now. All those things are top of mind and top on the list of what we're going to do, but I think we're starting to see some of the models of the ways that we can invest, and it'll actually pay off in return for us.

Speaker Change #171: Sort of said.

Speaker Change #173: We've got 100 things to fix it UA and of those 100 things I'd say, probably 70% to 75% of them are self inflicted the good news about that is that we can we can identify them. We can we can tweak them, we can make them better.

Kevin Plank: The good news about that is that we can identify them, and we can tweak them. We can make them better. And the other great thing is that while we'd have 100 things to fix, we also have 1,000 things going for us. You know, when I think about just the sports marketing aspect of, you know, I'm not going to let Dave hear this, but I think with, you know, Notre Dame and IMG, that's probably enough just to build a sports brand with the credibility of, you know, one of the best high schools, and it's not the best high school and one of the best colleges. It's not the best college, you know, in the country

Speaker Change #173: And the other great things is that while we would have 100 things to fix we also have a thousand things going for us.

Speaker Change #171: When I think about just the sports marketing aspect of it.

Laurent: And so, we'll be applying that, again, we don't have all the facts, but we like some of the indications that we're seeing right now. We share like driving a more full price business, and that 47 five gross margin is something, which is be a pretty good indicator for the health of how we're doing. Thank you, Kevin. Yeah, in fact, yeah, the Gross Margin, nice gross margin beat on the first quarter. David, I think you mentioned there were three factors that are incremental to the headwinds for the full year.

Speaker Change #140: I'm not going to let Dave here, this but I think with Notre Dame and IMG.

Speaker Change #147: That's probably enough just to build a sports brand with the credibility of one of the best High schools and it's not the best High School and one of the best colleges not the best College.

Kevin Plank: And so that's very sort of regional in terms of how I think about it in North America, but it's going to come in time. You know, we have the We've got half a billion dollars to spend on marketing. It doesn't feel like we're spending it.

Speaker Change #147: And the country and so that's that's very sort of.

Speaker Change #140: Regional in terms of how to think about it in North America, but it.

Speaker Change #140: It is going to come in time, we have the <unk>.

Speaker Change #140: We've got half a billion dollars to spend in marketing it doesn't feel like we're spending it I want that impact would be there. We've got an incredible I think just platform that we have with performance and technical and design and style and we just haven't played our best game there yet so I'm really excited about this next chapter of maybe applying.

Laurent: I think you mentioned, you know, ocean freight effects and mix from license business. Maybe, could you, could you, could you kind of bridge it for us, how much those were in terms of incremental headwinds versus 90 days ago as we think about the full year guy on the Gross Margin? Yeah, I mean, I think, you know, what I was trying to elaborate on is the the main year of year drivers that are, you know, behind our full year improvement still are heavily weighted to the favorable pricing with less DTT discounting and also the supply chain benefits related to the improved product costing.

Kevin Plank: I want that impact to be there. You know, we've got an incredible platform that we have with performance and technique and design and style, and we just haven't played our best game there yet. So I'm really excited about this next chapter of maybe applying the lessons that have been learned over the years. As I talk about, we're thinking about Europe and Looking at what's happened in the U.S. and how we can sort of maybe make better decisions and choices there. But we've got a great hand to play.

Speaker Change #148: The lessons that have been learned over the years they talked about what we're thinking about Europe.

Speaker Change #148: Looking at what's happened in the U S and how we can sort of maybe make better decisions and choices there but.

Speaker Change #140: We've got a great hand to play I think we're putting in a plus team together.

Sam Poser: I think we're putting an A-plus team together. It's super exciting to have a dude, and I say that like a dude, like Eric, coming on board to join our team because we've got some really good UA experts, industry experts that are surrounding this table and just put us in a position to, you know, we can't guarantee anything, but I like our chances and I'll play this hand every day. If I can just follow up real quick,

Speaker Change #140: It's super exciting of having a dude and I say that like a do like Eric coming onboard to join our team.

Laurent: Those are the two real big positives on the full year. And, you know, obviously, we saw a little bit of extra benefit there as we went through Q1. But as we look forward, the impact on freight costs is probably the largest kind of newer developing headwind that's kind of taking away some of that Q1 overdrive. And then a close second to that would be, you know, the foreign currency headwinds that have been developing that we saw during the first three months and that are projected a little bit forward.

Speaker Change #141: We've got some really good UA experts industry experts that are surrounding this table and just put us in a position to we can't guarantee anything but.

Speaker Change #141: I like our chances and I'll play the sand every day.

Kevin Plank: I mean, I'm really talking about timing and, and, and, and, and, are you thinking of building this out in like getting North America turned around? Is it going to take, you know, 18 months, and you're going to do it sort of slow and steady? Or, or is this, you know, what sort of timeframe do you have with your own definition of getting? I think after the last call, we sort of pinned people to fall 25, and so we sort of gave ourselves this 18-month outlook, but to be honest, I don't know if there's a definition where you say we're done.

Speaker Change #176: If I can just follow up real quick I mean, I'm really talking about timing and.

Speaker Change #176: Mike.

Mike: Or are you thinking of building this out by getting the North America turned around is it going to take.

Speaker Change #154: 18 months, and Youre going to do it sort of slow and steady or or is this what sort of what what kind of timeframe do you have in your own definition of getting.

Laurent: The change in mix due to licensing sales and some of the challenge margins on the off-price channel, that's a little bit of a smaller developing headwind. The first two around freight costs and that facts are a little bit bigger. Okay, thank you. Congrats again on the beat and good luck with back to school. Thank you. Thanks.

Speaker Change #154: North America on the right track I mean, how are you thinking about that at least.

Speaker Change #154: 12 months thing or 18 months thing.

Speaker Change #149: What I'm trying to get them out.

Speaker Change #177: I think after the last call, we sort of pin people to fall 25, and so we sort of gave ourselves. This 18 month outlook, but to be honest, we're not I don't know if there's a.

Sam Poser: Our next question will come from Sam Poser with Williams treating. You may now go ahead. Well, many of my questions have been answered. Thank you guys for taking my question. I was wondering just to follow up on the back cap guidance. When you're shit, you said that there's a shift out of marketing spend out of Q2. Are we going to see, is that going to go more into Q4 because as sort of the beginning of this setup for where you're anticipating improvements into fiscal 26?

Speaker Change #140: So there is a definition where you say we've done we're done this is just going to be a constant iteration in work in progress.

Kevin Plank: This is just going to be a constant iteration and work in progress, and so I think you'll start seeing it, and again, we're not sitting on our hands until fall 25. We've got some great products in the marketplace right now. There are incredible things we have with our Meridian platform, our Unstoppable platform that our team has been on for a while, and so our base layer platform. There are just some easy things that we can do to make sure that we're getting full credit.

Speaker Change #149: So I think youll start seeing and again, we're not sitting on our hands until fall 25, we've got some great product in the marketplace right now.

Speaker Change #149: Incredible things, we have we have with our meridian platform.

Speaker Change #149: Our unstoppable platform that our team has been on for a while and so our base layer platform. There is just some easy things that we can do.

Speaker Change #149: To make sure that were getting full credit is that I don't think that people see us as a you know unless you did grow up 15, or 20 years ago I'm not sure if or if you see compression as being under Armours founding product and so we need to make sure that we're giving the respect tell the story of the products that we're building.

Kevin Plank: I don't think that people see us as a, unless you did grow up 15 or 20 years ago, I'm not sure if you see compression as being Under Armour's founding product, and so we need to make sure that we're giving the respect to tell the story of the products that we're building, so I'm really confident and excited about how that, you know, I can't emphasize enough of where an organization that just needs to be focused on product, story, region, make sure those three aspects are coming together quickly, so yeah, I don't know if it's long, but you're going to see constant progress. I think you'll see things like, wow, that was a really great spot from UA.

Sam Poser: Well, actually, for some of Q1's bottom line overdrive was shifting some of that marketing spend to Q3 and Q4 and then similar with Q2 as well. We are backloading a little bit more in the back cap on marketing than we originally anticipated in our outlook, but it's not all relative to Q4. Some of it is laying into the brand for going into fiscal 26 and beyond, but also making sure that we're really supporting the back to school and also the holiday sales that are in the holiday sales mainly that are in Q3 for us or calendar Q4.

Speaker Change #149: So I'm really confident and excited about how that I can't emphasize enough of where an organization that just needs to be focused on product story region mixture of those three aspects are coming together.

Speaker Change #149: Quickly so.

Speaker Change #149: Yeah, I don't know, if it's long, but youre going to see constant progress I think you'll see things like Wow that was a really great spot from the way that was a really cool product. There are some things that you can get behind and then you'll watch us begin to do the SKU reduction distort towards the products that are working and it doesn't just mean it will be best level products, but that's that characteristic I've said is that we don't have to abandon some.

Kevin Plank: That was a really cool product. You know, there are some things that you can get behind, and then you'll watch us begin to do the skew reduction, distort for the products that are working, and it doesn't just mean it'll be best-level products, but that's that characteristic I said, is that we don't have to abandon some of the current consumers we have in order to just start making more better and best-level

Speaker Change #149: The current consumers, we have in order to start making more.

Speaker Change #149: Better and best level premium product.

Kevin Plank: And I think, Sam, even though we're not ready to talk about fiscal 26 or 27 revenues for North America, one thing you can be assured of is that we're going to keep driving forward on being a healthier business in North America, and I think that's really what we're excited about right now, and we'll talk more about the future on future calls. Thank you very much. Thank you, Sam. This concludes our question-and-answer session, as well as the conference. Thank you for attending today's presentation.

Sam Poser: Thank you. And then secondly, what you were saying, there sort of is a combination of You mentioned having patience and wanting to do things quickly and I guess the question is, what is the sort of game plan look for turning around to getting North America sort of on the track you want to and how are you balancing patience, brand, speed, all of that as we look forward? I turned 52 on Tuesday, Sam.

Speaker Change #149: And I think Sam even though we're not ready to talk about fiscal 'twenty six 'twenty seven revenues for North America. One thing you can be assured of is that we're going to keep driving forward on being a healthier business in North America and I think that's that's really what we're excited about right now and we'll talk more about the future in coming calls.

Speaker Change #183: Alright, Thank you very much.

Sam Poser: Thank you Sam.

Speaker Change #163: This concludes our question and answer session as well as the conference.

Speaker Change #166: In today's presentation you may now disconnect.

Sam Poser: I've actually been growing in mature, I guess. Thank you for the happy birthday. As an entrepreneur, you always feel late. It's got to be done tomorrow and that's something which has been somewhat of a strength and at times, it can be difficult, especially as you get large and need to scale as an organization. But I think really coming into our own as a business, we're opening this new headquarters which is beautiful here in Baltimore.

Sam Poser: I don't know if that's exactly where shareholders would have liked us to spend money but this thing is built and it's going to be an incredible edifice for us that today we think it's going to be a massive asset for the business. So I think really it's a matured of just recognizing the hand that we have. I've used this analogy of how to pair two's and we've had a world flush before and today we have neither but we've been able to win with both.

Sam Poser: So I feel pretty good about the hand that we have and just looking at the assets and I've sort of said, we've got a hundred things to fix at UA and of those hundred things, I'd say probably 75% of them are self-inflicted. The good news about that is that we can identify them, we can tweak them, we can make them better. And the other great thing is that while we have a hundred things to fix, we also have a thousand things going for us.

Sam Poser: When I think about just the sports marketing aspect of, I'm not going to let Dave hear this but I think with, you know, Notre Dame and IMG, you know, this is probably enough just to build a sports brand with the credibility of, you know, one of the best high schools and it's not the best high school and one of the best colleges, not the best college, you know, in the country. And so that's very sort of regional in terms of how I think about it in North America but it's going to come in time.

Sam Poser: You know, we have the, we've got half a billion dollars suspended marketing. It doesn't feel like we're spending it. I want that impact to be there. You know, we've got an incredible, I think, just platform that we have with performance and technical and design and style and we just haven't played our best game there yet. So I'm really excited about this next chapter of maybe applying the lessons that have been learned over the years.

Sam Poser: They talk about we're thinking about Europe and looking at what's happened in the US and how we can sort of maybe make better decisions and choices there but we've got a great hand to play. I think we're putting an A-plus team together. It's super exciting of having a dude and I say that like a dude like Eric coming on board to join our team because we've got some really good UA experts, industry experts that are surrounding this table and just put us in a position to, you know, we can't guarantee anything but I like our chances and I'll play this hand every day.

Sam Poser: If I can just follow up real quick, I mean I'm really talking about timing and like are you thinking of building this out in like getting the North America turned around? Is it going to take, you know, 18 months and you're going to do it sort of slow and steady or is this, you know, what kind of time frame do you have with your own definition of getting and North America on the right track.

Sam Poser: I mean, how are you thinking about that? It is a 12-month thing or 18-month thing. That's what I'm trying to get married. Yeah, I think after the last call, we sort of pinned people to fall 25 and so we sort of gave ourselves this 18-month outlook. But to be honest, I don't know if there's a definition where you say we're done. This is just going to be a constant iteration and work in progress.

Sam Poser: And, you know, so I think you'll start seeing and again, we're not sitting on our hands until fall 25. We've got some great product in the marketplace right now. You know, there's incredible things we have with, you know, our meridian platform, you know, unstoppable platform that our team has been on for a while and so, you know, our base layer platform. There's just some easy things that we can do to make sure that we're getting, you know, full credit is that I don't think that people see us as a, you know, unless you did grow up 15 or 20 years ago, I'm not sure if you, you know, see compression as being, you know, an enormous founding product.

Sam Poser: And so we need to make sure that we're giving the respect to tell the story of the products that we're building. So I'm really confident and excited about how that, you know, I can't emphasize enough of where an organization that just needs to be focused on product story region, make sure those three aspects are coming together quickly. So, yeah, I don't know if it's long, but you're going to see constant progress.

Sam Poser: So I think you'll see things like, wow, that was a really great spot from UA. That was a really cool product. You know, there's some things that you can get behind. And then you'll watch us begin to, you know, do the skewer reduction. Distort for the products that are working and it doesn't just mean it'll be best level products, but, you know, that's that characteristic I said is that we don't have to abandon, you know, some of the current consumers we have in order to just start making more, you know, better and best level premium product.

Sam Poser: And I think Sam, you know, even though we're not ready to talk about, you know, fiscal 26 or 27 revenues for North America, one thing you can be assured of is that we're going to keep driving forward on being a healthier business in North America. And I think that's that's really what we're excited about right now. And we'll talk more about the future and coming calls.

Sam Poser: Thank you very much. Thank you, Sam.

Operator: This concludes our question and answer session as well as the conference. Thank you for today's presentation.

Operator: You may not.