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What changed in Under Armour, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Under Armour, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+332 added−338 removedSource: 10-K (2025-05-22) vs 10-K (2024-05-29)

Top changes in Under Armour, Inc.'s 2025 10-K

332 paragraphs added · 338 removed · 272 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

71 edited+7 added−20 removed37 unchanged
Biggest changeSee "Risk Factors—Business and Operational Risks— Our future success is substantially dependent on the continued service of our senior management and other key employees, and our continued ability to attract and retain highly talented new team members " included in Item 1A of this Annual Report on Form 10-K.
Biggest changeSee "Risk Factors—Business and Operational Risks— Our future success is substantially dependent on the continued service of our senior management and other key employees, and our continued ability to attract and retain highly talented new team members " included in Item 1A of this Annual Report on Form 10-K. 8 Table of Contents Information About Our Executive Officers Name Age Position Kevin Plank 52 President and Chief Executive Officer David Bergman 52 Chief Financial Officer Shawn Curran 61 Chief Supply Chain Officer Eric Liedtke 58 Brand President Yassine Saidi 47 Chief Product Officer Mehri Shadman 43 Chief Legal Officer and Corporate Secretary Kara Trent 45 President of the Americas Kevin Plank has been President and Chief Executive Officer since April 2024.
In determining our compensation practices, we focus on offering competitive pay that is based on market data with packages that appropriately reflect roles and geographic locations and are transparently communicated. We believe in "pay for performance" and seek to design plans and programs to support a culture of high performance where we reward what is accomplished and how.
In determining our compensation practices, we focus on offering competitive pay that is based on market data with packages that appropriately reflect roles and geographic locations and are transparently communicated. We believe in "pay for performance" and seek to design plans and programs that support a culture of high performance where we reward what is accomplished and how.
Our most direct competitors include, among others, NIKE, adidas, PUMA and lululemon athletica, which are large apparel and footwear brands with strong worldwide brand recognition and in some cases, significantly greater resources than us. Within our international markets, in addition to global brands, we also compete with regional and country-specific brands that may have stronger local brand recognition.
Our direct competitors include, among others, NIKE, adidas, PUMA and lululemon athletica, which are large apparel and footwear brands with strong worldwide brand recognition and in some cases, significantly greater resources than us. Within our international markets, in addition to global brands, we also compete with regional and country-specific brands that may have stronger local brand recognition.
In countries where we no longer have direct sales operations, such as Chile, Ecuador, Argentina, Colombia and Brazil, we distribute our products through independent distributors, sourced primarily through our international distribution hub in Panama. Product Design and Development Our products are developed by internal product development teams and manufactured with technical fabrications produced by third parties.
In countries where we no longer have direct sales operations, such as Chile, Ecuador, Argentina, Colombia and Brazil, we distribute our products through independent distributors, sourced through our international distribution hub in Panama. Product Design and Development Our products are developed by internal product development teams and manufactured with technical fabrications produced by third parties.
Accessories Accessories primarily includes the sale of athletic performance gloves, bags, headwear and socks. Some of our accessories include the technologies mentioned above and are designed with advanced fabrications to provide the same level of performance as our other products. License We have agreements with licensees to develop certain Under Armour apparel, footwear, accessories and equipment.
Accessories Accessories primarily includes athletic performance gloves, bags, headwear and socks. Some of our accessories include the technologies mentioned above and are designed with advanced fabrications to provide the same level of performance as our other products. License We have agreements with licensees to develop certain Under Armour apparel, footwear, accessories and equipment.
We have a license agreement with a partner in Japan, which produces, markets and sells our branded apparel, footwear and accessories. Our branded products are sold in this market to large sporting goods retailers, independent specialty stores, professional sports teams and licensee-owned retail stores. We hold a non-controlling interest in our partner.
We have a license agreement with and a non-controlling interest in a partner in Japan, which produces, markets and sells our branded apparel, footwear and accessories. Our branded products are sold in this market to large sporting goods retailers, independent specialty stores, professional sports teams and licensee-owned retail stores.
In addition, we must compete with others for purchasing decisions and limited floor space at retailers. We believe we have been largely successful in this area because of the relationships we have developed and the sales performance of our products.
In addition, we must compete with others for purchasing decisions and limited floor space at retailers. We believe we have been successful in this area because of the relationships we have developed and the sales performance of our products.
Intellectual Property We own the material trademarks used in connection with the marketing, distribution and sale of our products in the United States and in key international markets where our products are currently sold or manufactured.
Intellectual Property We own the trademarks used in connection with the marketing, distribution and sale of our products in the United States and in key international markets where our products are currently sold or manufactured.
Our mission is to make athletes better, and we aim to innovate our technical apparel products to provide performance benefits, such as creating breathable warmth, helping the body stay cool and dry in hotter-than-normal conditions; harnessing the body's energy to help fight fatigue; adapting to each athlete's unique body shape to improve fit and comfort and prevent slippage; and providing protection against rain while maintaining breathability.
We aim to make athletes better and to innovate our technical apparel products to provide performance benefits, such as creating breathable warmth, helping the body stay cool and dry in hotter-than-normal conditions; harnessing the body's energy to help fight fatigue; adapting to each athlete's unique body shape to improve fit and comfort and prevent slippage; and providing protection against rain while maintaining breathability.
However, if retailers experience higher demand for or earn higher margins from our competitors' products or their own private label offerings, they may favor the display and sale of those products. We believe we compete successfully because of our brand image and recognition, the performance and quality of our products and our selective distribution policies.
However, if retailers experience higher demand for or earn higher margins from our competitors' products or their own private label offerings, they may favor the display and sale of those products. We believe we compete successfully because of our brand image and recognition, the performance and quality of our products and our selective distribution strategies.
Our sustainability strategy sets forth our long-term aspiration of finding new ways to drive performance through sustainable innovations that not only deliver a better product for athletes, but also a better world. Our sustainability strategy is centered around three interconnected pillars—products, home field and team.
Sustainability Our sustainability strategy sets forth our long-term aspiration of finding new ways to drive performance through sustainable innovations that not only deliver a better product for athletes, but also support a better world. Our sustainability strategy is centered around three interconnected pillars—product, home field and team.
Marketing and Promotion We currently focus on marketing our products to consumers primarily for use in athletics, fitness, training activities, as well as casual use through sportswear products, emphasizing our ability to support the needs of our athletes at all moments of their day.
Marketing and Promotion We currently focus on marketing our products to consumers primarily for use in athletics, fitness, training activities, as well as casual use through sportswear products, emphasizing our ability to support the needs of our athletes throughout all moments of their day.
During Fiscal 2024, our licensees offered collegiate apparel and accessories, baby and youth apparel, team uniforms, socks, underwear, lunch boxes, coolers, water bottles, eyewear and other specific hard goods equipment that feature performance advantages and functionality like our other product offerings.
During Fiscal 2025, our licensees offered collegiate apparel and accessories, baby and youth apparel, team uniforms, socks, underwear, lunch boxes, coolers, water bottles, eyewear and other specific hard goods equipment that feature performance advantages and functionality like our other product offerings.
Refer to Note 19 to the Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K, for net revenues by segment.
Refer to Note 20 to the Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K, for net revenues by segment.
We will continue to aggressively police our trademarks and pursue those who infringe, both domestically and internationally. We believe the distinctive trademarks we use in connection with our products are important in building our brand image and distinguishing our products from those of others. These trademarks are among our most valuable assets.
We will continue to aggressively police our trademarks and pursue those who infringe, both domestically and internationally. 6 Table of Contents We believe the distinctive trademarks we use in connection with our products are important in building our brand image and distinguishing our products from those of others. These trademarks are among our most valuable assets.
In addition to our distinctive trademarks, we also place significant value on our trade dress, which is the 6 Table of Contents overall image and appearance of our products, and we believe our trade dress helps to distinguish our products in the marketplace. We also have copyright protection covering various designs and other original works.
In addition to our distinctive trademarks, we also place significant value on our trade dress, which is the overall image and appearance of our products, and we believe our trade dress helps to distinguish our products in the marketplace. We also have copyright protection covering various designs and other original works.
We are also committed to achieving pay equity within all teammate populations, and with the assistance of third-party experts, conduct an annual review of pay equity and market comparison data. When we identify opportunities, we take prompt actions to close any gaps.
We are also committed to achieving pay equity within all teammate populations, and in the United States, with the assistance of third-party experts, conduct an annual review of pay equity and market comparison data. When we identify opportunities, we take prompt actions to close any gaps.
Sales and Distribution The majority of our sales are generated through wholesale channels, including national and regional sporting goods chains, independent and specialty retailers, department store chains, mono-branded Under Armour retail stores in certain international markets, institutional athletic departments and leagues and teams.
Sales and Distribution Our sales are generated through wholesale channels, including national and regional sporting goods chains, independent and specialty retailers, department store chains, mono-branded Under Armour retail stores in certain international markets, institutional athletic departments and leagues and teams.
Plank also serves on the Board of Directors of the National Football 9 Table of Contents Foundation and College Hall of Fame, Inc., and is a member of the Board of Trustees of the University of Maryland College Park Foundation. David Bergman has been Chief Financial Officer since November 2017. Mr.
Plank also serves on the Board of Directors of the National Football Foundation and College Hall of Fame, Inc., and is a member of the Board of Trustees of the University of Maryland College Park Foundation. David Bergman has been Chief Financial Officer since November 2017. Mr.
Factory House stores serve an important role in inventory management by allowing us to sell a portion of excess, discontinued and out-of-season products, while maintaining the pricing integrity of our brand in our other distribution channels. We also sell products that are specifically designed for sale in our Factory House stores.
Factory House stores serve an important role in inventory management, as further discussed below, by allowing us to sell a portion of excess, discontinued and out-of-season products, while maintaining the pricing integrity of our brand in our other distribution channels. We also sell products that are specifically designed for sale in our Factory House stores.
We also seek to sponsor and host consumer events to drive awareness and brand authenticity from a grassroots level by hosting combines, camps and clinics for young athletes in a variety of sports.
We also seek to sponsor and host consumer events to drive awareness and brand authenticity from a grassroots level by hosting combines, camps 3 Table of Contents and clinics for young athletes in a variety of sports.
Our product teams also work closely with our sports marketing and sales teams and with professional, collegiate and young athletes to identify product developments, trends and determine market needs. Sourcing, Manufacturing and Quality Assurance Many specialty fabrics and other raw materials used in our apparel products are technically advanced products produced by third parties.
Our product teams also work closely with our marketing and sales teams and with professional, collegiate and young athletes to identify product developments, trends and determine market needs. 5 Table of Contents Sourcing, Manufacturing and Quality Assurance Many specialty fabrics and other raw materials used in our apparel products are technically advanced products produced by third parties.
These types of innovations and technologies, embedded in many of our apparel products, include: COLDGEAR®, COLDGEAR INFRARED®, HEATGEAR®, UA Iso-Chill™, UA RUSH™, UA SMARTFORM™ and UA STORM™. Footwear Footwear includes products for running, training, basketball, cleated sports, recovery and outdoor applications.
These types of innovations and technologies, embedded in many of our apparel products, include: COLDGEAR®, COLDGEAR INFRARED®, HEATGEAR®, UA Iso-Chill™, UA RUSH™, UA SMARTFORM™ and UA STORM™. Footwear Footwear includes products for running, training, basketball, cleated sports, recovery and outdoor applications, as well as casual use.
We also believe that having an engaged, diverse and committed workforce not only enhances our culture, it drives our business success, ultimately helping us to deliver the most innovative products that make athletes better.
We also believe that having an engaged and committed workforce enhances our culture and drives our business success, ultimately helping us to deliver the most innovative products that make athletes better.
Trent served in various leadership roles in Footwear and Apparel Merchandising and Planning at PUMA North America from May 2007 to March 2015. She began her career at Reebok International from 2002 to 2007.
Trent served in various leadership roles in Footwear and Apparel 9 Table of Contents Merchandising and Planning at PUMA North America from May 2007 to March 2015. She began her career at Reebok International from 2002 to 2007.
We also post on this website our key corporate governance documents, including our board committee charters, our corporate governance guidelines and our code of conduct and ethics. 10 Table of Contents
We also post on this website our key corporate governance documents, including our board committee charters, our corporate governance guidelines and our code of conduct and ethics.
Consumers experience a premium expression of our brand through our Brand House stores while having broader access to our performance products. In Fiscal 2024, sales through our wholesale, direct-to-consumer and licensing channels represented 57%, 41% and 2% of net revenues, respectively.
Consumers experience a premium expression of our brand through our Brand House stores while having broader access to our performance products. In Fiscal 2025, sales through our wholesale, direct-to-consumer and licensing channels represented 58%, 40% and 2% of net revenues, respectively.
As a result, our products are seen on the field and the court, and 3 Table of Contents by various consumer audiences through the internet, television, magazines and live sporting events. This exposure helps us establish on-field authenticity as consumers can see our products being worn by high-performing athletes.
As a result, our products are seen on the field and the court, and by various consumer audiences through the internet (including social media platforms), television, magazines and live sporting events. This exposure helps us establish on-field authenticity as consumers can see our products being worn by high-performing athletes.
Cotton is a commodity that is subject to price fluctuations and supply shortages. Additionally, our footwear uses raw materials sourced from a diverse base of third-party suppliers. This includes chemicals, petroleum-based components and natural materials like cotton and rubber that are also subject to price fluctuations and supply shortages. Substantially all of our products are manufactured by unaffiliated manufacturers.
Additionally, our footwear uses raw materials sourced from a diverse base of third-party suppliers, including chemicals, petroleum-based components and natural materials like cotton and rubber. All of these commodities are subject to price fluctuations and supply shortages. Substantially all of our products are manufactured by unaffiliated manufacturers.
Where appropriate, we strive to qualify multiple manufacturers for particular product types and fabrications. We also seek vendors that can perform multiple manufacturing stages, such as procuring raw materials and providing finished products, which helps us control our cost of goods sold. We enter into various agreements with our contract manufacturers, including non-disclosure and confidentiality agreements.
We also seek vendors that can perform multiple manufacturing stages, such as procuring raw materials and providing finished products, which helps us control our cost of goods sold. We enter into various agreements with our contract manufacturers, including non-disclosure and confidentiality agreements.
We have registered trademarks around the globe, including UNDER ARMOUR®, HEATGEAR®, COLDGEAR®, HOVR® and the Under Armour UA Logo ®, and we have applied to register many other trademarks. This Annual Report on Form 10-K also contains additional trademarks and tradenames of our Company and our subsidiaries.
We were incorporated as a Maryland corporation in 1996. We have registered trademarks around the globe, including UNDER ARMOUR®, HEATGEAR®, COLDGEAR®, HOVR® and the Under Armour UA Logo ®, and we have applied to register many other trademarks. This Annual Report on Form 10-K also contains additional 2 Table of Contents trademarks and tradenames of our Company and our subsidiaries.
Prior to that he served as EVP, Chief Operating Officer of Gap, Inc. from March 2020 to June 2021; EVP, Global Supply Chain and Product/Store Operations from March 2019 to February 2020; and EVP, Global Supply Chain and Product Operations from October 2017 to February 2019.
Prior to that he served as EVP, Chief Operating Officer of Gap, Inc. from March 2020 to June 2021; EVP, Global Supply Chain and Product/Store Operations from March 2019 to February 2020; and EVP, Global Supply Chain and Product Operations from October 2017 to February 2019. Eric Liedtke has served as Brand President since January 2025. Mr.
Talent Development and Engagement Our purpose of empowering those who strive for more is embodied in our commitment to helping our teammates develop their skills, grow their careers and achieve their goals. We believe our investment in these areas enhances our teammate engagement, improves the efficiency and productivity of our work and ultimately drives better results for our business.
Our values are embodied in our commitment to helping our teammates develop their skills, grow their careers and achieve their goals. We believe our investment in these areas enhances our teammate engagement, improves the efficiency and productivity of our work and ultimately drives better results for our business.
We also own trademark registrations for other trademarks including, among others, UA®, ARMOUR®, HEATGEAR®, COLDGEAR®, PROTECT THIS HOUSE®, I WILL®, and many trademarks that incorporate the term ARMOUR such as ARMOUR FLEECE® and ARMOUR BRA TM . We also own registrations to protect our connected fitness branding such as MapMyFitness® and associated MapMy marks.
We also own trademark registrations for other trademarks including, among others, UA®, ARMOUR®, HEATGEAR®, COLDGEAR®, PROTECT THIS HOUSE®, I WILL®, and many trademarks that incorporate the term ARMOUR such as ARMOUR FLEECE® and ARMOUR BRA®.
Corporate Other consists primarily of (i) operating results related to our MapMyFitness digital platform, which includes MapMyRun® and MapMyRide® (collectively "MMR"), and other digital business opportunities; (ii) general and administrative expenses not allocated to an operating segment, including expenses associated with centrally managed departments such as global marketing, global IT, global supply chain and innovation, and other corporate support functions; (iii) restructuring and restructuring related charges, if any; and (iv) certain foreign currency hedge gains and losses.
Corporate Other consists primarily of (i) general and administrative expenses not allocated to an operating segment, including expenses associated with centrally managed departments such as global marketing, global information technology, global supply chain and innovation, and other corporate support functions; (ii) restructuring and restructuring related charges, if any; (iii) certain foreign currency hedge gains and losses; and (iv) operating results related to our MapMyFitness digital platform, which was sold during the second quarter of Fiscal 2025.
Our North America segment accounted for approximately 61% of our net revenues for Fiscal 2024, while our EMEA, Asia-Pacific and Latin America segments combined represented approximately 38%. Net revenues generated from the sales of our products in the United States were $3.2 billion for Fiscal 2024.
Our North America segment accounted for approximately 60% of our net revenues for Fiscal 2025, while our EMEA, Asia-Pacific and Latin America segments combined represented approximately 40%. Net revenues 4 Table of Contents generated from the sales of our products in the United States were $2.8 billion for Fiscal 2025.
We also sell our branded products to various sports clubs and teams in Europe. We generally distribute our products to our retail customers and e-commerce consumers in Europe through a third-party logistics provider in the Netherlands and a bonded warehouse in the United Kingdom. We sell our apparel, footwear and accessories through independent distributors in the Middle East and Africa.
We generally distribute our products to our retail customers and e-commerce consumers in Europe through third-party logistics providers in the Netherlands and the United Kingdom. We sell our apparel, footwear and accessories through independent distributors in the Middle East and Africa.
As of March 31, 2024, in North America, we had 183 Factory House stores primarily located in outlet centers and 17 Brand House stores throughout the United States and Canada. Consumers can also purchase our products directly from our e-commerce website.
Our direct-to-consumer sales are generated through our Brand and Factory House stores and e-commerce website. As of March 31, 2025, in North America, we had 180 Factory House stores primarily located in outlet centers and 15 Brand House stores throughout the United States and Canada. Consumers can also purchase our products directly from our e-commerce website.
The fabric and other raw materials used to manufacture our apparel products are sourced by our contracted manufacturers from a limited number of suppliers pre-approved by us . In Fiscal 2024, 5 Table of Contents our top five suppliers provided approximately 38% of the fabric used in our apparel and accessories.
The fabric and other raw materials used to manufacture our apparel products are sourced by our contracted manufacturers from a limited number of suppliers pre-approved by us . In Fiscal 2025, our top five suppliers provided approximately 38% of the fabric used in our apparel and accessories. These fabric suppliers have primary locations in Taiwan, China, Malaysia and Vietnam.
In Fiscal 2024, our apparel and accessories products were manufactured by 36 primary contract manufacturers, operating in 20 countries, with approximately 63% of our apparel and accessories products manufactured in Jordan, Vietnam, Cambodia and Indonesia. Of our 36 primary contract manufacturers, ten produced approximately 68% of our apparel and accessories products.
In Fiscal 2025, our apparel and accessories products were manufactured by 39 primary contract manufacturers, operating in 18 countries, with approximately 67% of our apparel and accessories products manufactured in Jordan, Vietnam, Cambodia and Indonesia. Of our 39 primary contract manufacturers, ten produced approximately 69% of our apparel and accessories products.
However, competition for employees in our industry is intense, and we regularly collect feedback to better understand and improve our teammate experience and identify opportunities to continually strengthen our culture.
We believe these efforts keep our teammates engaged and motivated to do their best work. However, competition for employees in our industry is intense, and we regularly collect feedback to better understand and improve our teammate experience and identify opportunities to continually strengthen our culture.
This approach enables us to select and create superior, technically advanced materials, curated to our specifications, while focusing our product development efforts on style, performance and fit. We seek to deliver superior performance in all products, with a mission to make athletes better.
This approach enables us to select and create superior, technically advanced materials, curated to our specifications, while focusing our product development efforts on style, performance and fit. We seek to deliver superior performance in all products to make athletes better. Our developers proactively identify opportunities to create and improve performance products that meet the evolving needs of our consumers.
Retail Presentation Our retail marketing strategy is focused on increasing floor space dedicated to our products within our major wholesale accounts and elevating the presentation of our products within our Brand and Factory House retail stores.
We also utilize social media to engage consumers and promote connectivity with our brand and products while engaging with our consumers throughout their day. Retail Presentation Our retail marketing strategy is focused on increasing floor space dedicated to our products within our major wholesale accounts and elevating the presentation of our products within our Brand and Factory House retail stores.
In addition to competitive time off benefits, our full-time teammates also receive 40 hours of additional paid time off each year for personal volunteer activities performed during working hours.
In addition to competitive time off benefits, our full-time corporate teammates also receive 40 hours of additional paid time off each year for personal volunteer activities performed during working hours. We believe that giving back to the communities where we live and work is central to our culture.
No single customer accounted for more than 10% of the Company's net revenues for Fiscal 2024. 4 Table of Contents North America We sell our apparel, footwear and accessories in North America through wholesale and direct-to-consumer channels.
No single customer accounted for more than 10% of the Company's net revenues for Fiscal 2025. North America We sell our apparel, footwear and accessories in North America through wholesale and direct-to-consumer channels. We also earn license revenues in North America based on our licensees' sales of collegiate apparel and accessories, as well as other licensed products.
All trademarks and trade names appearing in this Annual Report on Form 10-K are the property of their respective holders. 2 Table of Contents Products Our product offerings consist of apparel, footwear and accessories for men, women and youth.
All trademarks and trade names appearing in this Annual Report on Form 10-K are the property of their respective holders. Products Our product offerings consist of apparel, footwear and accessories for men, women and youth. We market our products at multiple price levels and provide consumers with products that we believe are superior to non-performance-oriented athletic products.
In some instances, we arrange to have products shipped directly to customer-designated facilities from the factories that manufacture our products. EMEA We sell our apparel, footwear and accessories in EMEA primarily through wholesale customers and independent distributors, along with e-commerce websites and Brand and Factory House stores we operate within Europe.
EMEA We sell our apparel, footwear and accessories in EMEA primarily through wholesale customers and independent distributors, along with e-commerce websites and Brand and Factory House stores we operate within Europe. We also sell our branded products to various sports clubs and teams in Europe.
Our developers proactively identify opportunities to create and improve performance products that meet the evolving needs of our consumers. We design products with consumer-valued technologies, utilizing color, texture and fabrication to enhance consumer perception and understanding of product use and benefits.
We design products with consumer-valued technologies, utilizing color, texture and fabrication to enhance consumer perception and understanding of product use and benefits.
These fabric suppliers have primary locations in Taiwan, China, Malaysia and Vietnam. The fabrics used by our suppliers and manufacturers are primarily synthetic and involve raw materials, including petroleum-based products that may be subject to price fluctuations and shortages. We also use cotton as a blended fabric in some of our apparel products.
The fabrics used by our suppliers and manufacturers are primarily synthetic and involve raw materials, including petroleum-based products. We also use cotton as a blended fabric in some of our apparel products, much of which is sourced in the United States.
Saidi held various roles in performance Tennis Product and Marketing at adidas from May 2003 to June 2011. Mehri Shadman has been Chief Legal Officer and Corporate Secretary since October 2022. Ms. Shadman joined Under Armour in 2013 and served as Assistant Corporate Secretary from January 2017 to October 2022.
From June 2011 to June 2020, he held various leadership roles in SportStyle Footwear, Partnerships, Collaborations and Global Sales at PUMA. Prior to that, Mr. Saidi held various roles in performance Tennis Product and Marketing at adidas Group from May 2003 to June 2011. Mehri Shadman has been Chief Legal Officer and Corporate Secretary since October 2022. Ms.
Latin America We sell our apparel, footwear and accessories in Mexico through wholesale and direct-to-consumer channels. We distribute our products in Mexico through a third-party logistics provider.
We also have a license agreement with and a non-controlling interest in a partner in Australia, which sells custom branded teamwear through e-commerce websites. Latin America We sell our apparel, footwear and accessories in Mexico through wholesale and direct-to-consumer channels. We distribute our products in Mexico through a third-party logistics provider.
Consistent with our purpose, we believe that our brand is stronger when our collective team is fully engaged and working together to support our athletes around the world.
Human Capital Management Our employees, whom we refer to as teammates, are central to driving our long-term success as an organization and brand. Consistent with our values, we believe that our brand is stronger when our collective team is fully engaged and working together to support our athletes around the world.
Further, we leverage our relationships with athletes, teams, leagues and youth experiences in our global and regional marketing and promotions. Media We feature our products in a variety of national digital, broadcast, and print media outlets. We also utilize social media to engage consumers and promote connectivity with our brand and products while engaging with our consumers throughout their day.
We sponsor and sell our products to international sports teams, which helps drive brand awareness in various countries and regions worldwide. Further, we leverage our relationships with athletes, teams, leagues and youth experiences in our global and regional marketing and promotions. Media We feature our products in a variety of national digital, broadcast, and print media outlets.
We distribute the majority of our products to our North American wholesale customers and our own retail stores and e-commerce channels from distribution facilities we lease and operate in California, Maryland and Tennessee. In addition, we distribute our products in Canada through a third-party logistics provider.
We currently distribute the majority of our products to our North American wholesale customers and our own retail stores and e-commerce channels from distribution facilities we lease and operate in California, Maryland and Tennessee. As previously disclosed, in September 2024, we announced our decision to exit our distribution facility in Rialto, California as part of our 2025 restructuring plan.
The purchasing decisions of consumers for our products often reflect highly subjective preferences that can be influenced by many factors, including advertising, media, product sponsorships, product improvements, preferences for inclusive products and brands and changing styles and trends. Sustainability At Under Armour, our mission is to make athletes better.
The purchasing decisions of consumers for our products often reflect highly subjective preferences influenced by various factors, including advertising, media, product sponsorships, product improvements and changing trends in style and design.
In Fiscal 2024, substantially all of our footwear products were manufactured by nine primary contract manufacturers, operating primarily in Vietnam, Indonesia and China. All of our manufacturers across all product divisions are evaluated for quality systems, social compliance and financial strength by our internal teams before being selected and on an ongoing basis.
All of our manufacturers across all product divisions are evaluated for quality systems, social compliance and financial strength by our internal teams before being selected and on an ongoing basis. Where appropriate, we strive to qualify multiple manufacturers for particular product types and fabrications.
Our human capital management strategy is therefore focused on creating an inclusive workplace where our teammates can thrive by attracting, developing and retaining talent through a competitive total rewards program, numerous development opportunities and a diverse, inclusive and engaging work environment.
Our human capital management strategy is therefore focused on creating an engaging workplace environment where our teammates can thrive by attracting, developing and retaining talent through a competitive total rewards program, numerous development opportunities and intentional trainings and programming. 7 Table of Contents As of March 31, 2025, we had approximately 14,400 teammates worldwide, including approximately 10,200 in our Brand and Factory House stores and approximately 1,000 at our distribution facilities.
Our total rewards programs, which are outlined on the careers page of our corporate website, are aimed at the varying health, financial and home-life needs of our teammates.
Our total rewards programs, which are outlined on the careers page of our corporate website, are aimed at the varying health, financial and home-life needs of our teammates. In the United States, where approximately 64% of our workforce is located, our full-time teammates are eligible for competitive healthcare and other benefits, in addition to market-competitive pay and broad-based bonuses.
Outside of the United States, we provide similarly competitive benefit packages to those of our U.S. teammates but tailored to market-specific practices and needs. We believe that giving back to the communities where we live and work is central to our culture.
Outside of the United States, we provide benefit packages tailored to market-specific practices and needs. We believe in promoting alignment between our teammates and stockholders.
In Fiscal 2024, sales of apparel, footwear and accessories represented 66%, 24% and 7% of net revenues, respectively. Licensing arrangements represented 2% of net revenues. Refer to Note 12 to the Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K, for net revenues by product category.
Refer to Note 12 to the Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K, for net revenues by product category. Apparel Our apparel is offered in a variety of styles and fits to enhance comfort and mobility, support active movement, regulate body temperature and improve performance regardless of weather conditions.
We are the official outfitter of athletic teams in several high-profile collegiate conferences and professional sport organizations, supporting the athletes on and off the field. We sponsor and sell our products to international sports teams, which helps drive brand awareness in various countries and regions worldwide.
We are the official outfitter of athletic teams in several high-profile collegiate conferences and professional sport organizations, supporting the athletes on and off the field. For example, as recently announced, we are an official supplier of footwear and gloves to the National Football League ("NFL").
Our apparel comes in three primary fit types: compression (tight fit), fitted (athletic fit) and loose (relaxed fit).
Our apparel is engineered to replace non-performance fabrics in athletics and fitness applications with innovation and technologies designed and merchandised with various techniques and styles. Our apparel comes in three primary fit types: compression (tight fit), fitted (athletic fit) and loose (relaxed fit).
Our total number of teammates fluctuates throughout the year, with a significant increase in seasonal teammates during the third quarter of each fiscal year. Diversity, Equity and Inclusion Our commitment to diversity, equity and inclusion starts at the top with a highly skilled and diverse Board of Directors.
Approximately 6,500 of our teammates were full-time. Of our approximately 7,900 part-time teammates, approximately 3% were seasonal teammates. Our total number of teammates fluctuates throughout the year, with a significant increase in seasonal teammates during the third quarter of each fiscal year.
We provide our corporate teammates one meeting-free day per year designated to focusing on professional development. We also offer resources to support individual development planning, including emphasizing development opportunities as part of teammates' annual goal setting process. We invest in developing the leadership strength and capabilities of people-leaders at all levels.
We prioritize and invest in a wide range of training and development opportunities for teammates at all levels, including through both online and instructor-led internal and external programs. We also offer resources to support individual development planning, including emphasizing development opportunities as part of teammates' annual goal setting process.
(Teammate Equity and Accountability Movement) Council, which consists of "director" level and above corporate teammates and focuses on fostering a diverse and inclusive work environment across our organization. Total Rewards Our total rewards strategy is focused on providing market competitive and internally equitable total rewards packages that allow us to attract, engage and retain a talented, diverse and inclusive workforce.
Additionally, through our succession planning efforts, we further focus on talent development for key roles within our organization. Total Rewards Our total rewards strategy is focused on providing market competitive and internally equitable total rewards packages that allow us to attract, engage and retain a talented workforce.
In addition to building a more diverse team, we believe fostering an inclusive and ethical culture is key to our values and who we are as an organization. We believe open lines of communication are critical to fostering this environment. This starts with "tone at the top" and we emphasize the importance of our Code of Conduct.
We believe open lines of communication are critical to fostering this environment. This starts with "tone at the top" and we emphasize the importance of our Code of Conduct. We encourage our teammates to "speak-up" when they have concerns, and we provide multiple reporting mechanisms for them to do so.
We market our products at multiple price levels and provide consumers with products that we believe are superior to non-performance-oriented athletic products. Our products are primarily designed for athletic and active occasions, though many of our products can be worn or used in casual occasions.
Our products are primarily designed for athletic and active occasions, though many of our products can be worn or used in casual occasions. In Fiscal 2025, sales of apparel, footwear and accessories represented 67%, 23% and 8% of net revenues, respectively. Licensing arrangements represented 2% of net revenues.
We believe that achievement of our long-term growth objectives depends, in part, on our ability to execute strategic initiatives in key areas including our wholesale, footwear, women’s and direct-to-consumer businesses. Additionally, our digital strategy is focused on supporting these long-term objectives, emphasizing connection and engagement with our consumers. We were incorporated as a Maryland corporation in 1996.
Achieving these long-term growth objectives depends, in part, on our ability to successfully execute strategic initiatives across key areas of the business, including within our North America region. In support of these long-term growth objectives, our digital strategy is designed to enhance consumer engagement and strengthen brand connectivity through multiple digital touchpoints.
We leverage assessments, mentoring, executive coaching, and interactive training programs across a variety of leadership topics to improve leadership effectiveness and drive the performance of our team. Additionally, through our succession planning efforts, we further focus on talent development for key roles within our organization. We believe these efforts keep our teammates engaged and motivated to do their best work.
We invest in developing the leadership strength and capabilities of people-leaders at all levels. We leverage assessments, mentoring, executive coaching, and interactive training programs across a variety of leadership topics to improve leadership effectiveness, develop leaders who model and promote an engaged and ethical culture and drive the performance of our team.
We currently have nine teammate-led Teammate Resource Groups, which amplify business initiatives, provide networking opportunities, support community outreach and promote cultural awareness. In addition, we have an internal diversity, equity and inclusion council, known as the Global T.E.A.M.
We require trainings on a wide range of topics for all of our corporate teammates and our retail and distribution facility leadership, including training designed to help our teammates make the right call and strengthen our culture. We currently have nine teammate-led Teammate Resource Groups, which amplify business initiatives, provide networking opportunities, support community outreach and promote cultural awareness.
Saidi was the Founder and Business Strategist at AGENC-Y, a Sport, Lifestyle and Fashion product company, from September 2018 to January 2024. From June 2011 to June 2020, he held various leadership roles in SportStyle Footwear, Partnerships, Collaborations and Global Sales at PUMA. Prior to that, Mr.
Yassine Saidi has served as Chief Product Officer since January 2024 and Executive Vice President, General Manager of Sportswear, Basketball, Curry, Run and Collaborations, since February 2025. Before joining Under Armour, Mr. Saidi was the Founder and Business Strategist at AGENC-Y, a Sport, Lifestyle and Fashion product company, from September 2018 to January 2024.
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Apparel Our apparel is offered in a variety of styles and fits to enhance comfort and mobility, support active movement, regulate body temperature and improve performance regardless of weather conditions. Our apparel is engineered to replace non-performance fabrics in athletics and fitness applications with innovation and technologies designed and merchandised with various techniques and styles.
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Refer to Note 13 to our Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K, for additional information. We also distribute our products in Canada through a third-party logistics provider. In some instances, we arrange to have products shipped directly to customer-designated facilities from the factories that manufacture our products.
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We also earn license revenues in North America based on our licensees' sales of collegiate apparel and accessories, as well as other licensed products. Our direct-to-consumer sales are generated through our Brand and Factory House stores and e-commerce website.
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In Fiscal 2025, substantially all of our footwear products were manufactured by nine primary contract manufacturers, operating primarily in Vietnam and Indonesia. However, we continue to explore ways to further diversify our sourcing, in light of global trade policy.
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Within these pillars, our strategy focuses on enabling materials innovation to bring about a more circular system, leaving our planet and shared spaces bettered by our presence. Additionally, our strategy focuses on championing diversity, equity and inclusion and human rights within our company, with our suppliers and their workers and in communities across our entire supply chain.
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Within these pillars, we challenge ourselves to improve our existing materials or create new materials that not only meet our athletes' expectations, but also responsibly reduce environmental impacts of our products and operations. Additionally, our strategy seeks to foster respect for human rights within our company, with our suppliers and their workers and in communities across our entire supply chain.
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We have always been focused on product innovation, and continue to challenge ourselves to improve our existing materials and to create new materials that meet our athletes' expectations. We are implementing circular design principles within our products' design and are working to reduce the environmental impact of our product development and manufacturing processes.
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Culture, Engagement and Talent Development We believe maintaining an engaging and ethical culture is key, not just to our values, but also our business success; it is part of our brand. Our Board of Directors has ongoing oversight of our human capital management strategies and programs and regularly reviews our progress and opportunities with respect to engagement and culture.
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We are exploring more ways to use digital technology to elevate the experience of our customers and consumers while also reducing the impact of our operations on the environment. Increasingly, we are working with our supply chain to embed sustainable practices and be mindful about the sustainability profiles of key raw materials.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe are subject to numerous risks and global events beyond our control which could negatively impact consumer spending or the operations of us or our customers or business partners, and therefore our results of operations, including: political or labor unrest; military conflict (such as the ongoing conflict between Russia and Ukraine, the ongoing war between Israel and Hamas and the conflict in the Red Sea region); terrorism; public health crises, disease epidemics or pandemics; natural disasters and extreme weather conditions, which may increase in frequency and severity due to climate change; economic instability resulting in the disruption of trade from foreign countries; the imposition of new laws, regulations and rules, including those relating to sustainability and climate change, data privacy, labor conditions, minimum wage, quality and safety standards and disease epidemics or other public health concerns; changes in diplomatic and trade relationships, trade policy or actions of foreign or U.S. governmental authorities impacting trade and foreign investment, particularly during periods of heightened tension between U.S. and foreign governments, including the imposition of new import limitations, duties, tariffs, anti-dumping penalties, trade restrictions or restrictions on the transfer of funds; inflation; and changes in local economic conditions in countries where our stores, customers, manufacturers and suppliers are located.
Biggest changeWe are subject to numerous risks and global events beyond our control which could negatively impact consumer spending or our own operations or operations of our customers or business partners, and therefore our results of operations, including: changes in diplomatic and trade relationships, trade policy or actions of foreign or U.S. governmental authorities impacting trade and foreign investment; inflation; military conflict; political or labor unrest; terrorism; public health crises, disease epidemics or pandemics; natural disasters and extreme weather conditions, which may increase in frequency and severity due to climate change; economic instability resulting in the disruption of trade from foreign countries; the imposition of new laws, regulations and rules, including those relating to sustainability and climate change, data privacy, labor conditions, minimum wage, quality and safety standards and disease epidemics or other public health concerns; and changes in local economic conditions in countries where our stores, customers, manufacturers and suppliers are located.
We may experience a significant disruption in the supply of fabrics or raw materials from current sources or, in the event of a disruption, we may be unable to locate alternative materials suppliers of comparable quality at an acceptable price, or at all.
We may experience a significant disruption in the supply of fabrics or raw materials from current sources or, in the event of a disruption, we may be unable to locate alternative suppliers of materials of comparable quality at an acceptable price, or at all.
Plank beneficially owns less than 15.0% of the total number of shares of Class A and Class B common stock outstanding, if Mr. Plank were to resign as an Approved Executive Officer of the Company (or was otherwise terminated for cause) or if Mr.
Plank beneficially owns less than 15% of the total number of shares of Class A and Class B common stock outstanding, if Mr. Plank were to resign as an Approved Executive Officer of the Company (or was otherwise terminated for cause) or if Mr.
We also rely on third parties for the operation of certain of our e-commerce websites, and do not control these service providers. Like other companies in our industry, we have in the past experienced, and we expect to continue to experience, cyberattacks, including phishing, cyber fraud incidents and other attempts to gain unauthorized access to our systems.
We also rely on third parties for the operation of certain of our e-commerce websites, and do not control these service providers. Like other companies in our industry, we have in the past experienced, and we expect to continue to experience, cyberattacks, including phishing, credential stuffing, cyber fraud incidents and other attempts to gain unauthorized access to our systems.
In addition, the adoption of new legislation, regulations, industry standards and reporting obligations, including related to data privacy, sustainability and climate change, or changes in the interpretation of existing regulations may result in significant unanticipated compliance costs or discontinuation of product sales and may impair the marketing of our products, resulting in significant loss of net revenues.
In addition, the adoption of new legislation, regulations, industry standards and reporting obligations, including related to data privacy, artificial intelligence, sustainability and climate change, or changes in the interpretation of existing regulations may result in significant unanticipated compliance costs or discontinuation of product sales and may impair the marketing of our products, resulting in significant loss of net revenues.
On the other hand, if we are unwilling to engage in promotional activity on a scale similar to that of our competitors, for instance, to protect our premium brand positioning, and unable to simultaneously offset declining promotional activity with increased sales at premium price points, our ability to achieve short-term growth targets may be negatively impacted, which could have a material adverse effect on our results of operations, financial condition and the price of our stock.
On the other hand, if we are unwilling to engage in promotional activity on a scale similar to that of our competitors, for instance, to protect our premium brand positioning, and unable to simultaneously offset declining promotional activity with increased sales at premium price points, our ability to achieve short-term growth targets 11 Table of Contents may be negatively impacted, which could have a material adverse effect on our results of operations, financial condition and the price of our stock.
The COVID-19 pandemic negatively affected the U.S. and global economies, disrupted global supply chains, financial markets and consumer spending, and led to significant travel and business restrictions, including mandatory closures, orders to "shelter-in-place" and restrictions on how businesses operate.
For example, the COVID-19 pandemic negatively affected the U.S. and global economies, disrupted global supply chains, financial markets and consumer spending, and led to significant travel and business restrictions, including mandatory closures, orders to "shelter-in-place" and restrictions on how businesses operate.
Additionally, if one or more of our suppliers were to experience significant financial difficulty, bankruptcy, insolvency or cease operations, or failed to comply with applicable labor or other laws, we may be required to seek alternative suppliers.
Additionally, if one or more of our suppliers were to experience significant financial difficulty, bankruptcy, insolvency or cease operations, or fail to comply with applicable labor or other laws, we may be required to seek alternative suppliers.
For example, while we require our suppliers, manufacturers and licensees of our products to operate their businesses in compliance with applicable laws and regulations, as well as the social and other standards and policies we impose on them, including our supplier code 14 Table of Contents of conduct, we do not control the conduct of these third parties.
For example, while we require our suppliers, manufacturers and licensees of our products to operate their businesses in compliance with applicable laws and regulations, as well as the social and other standards and policies we impose on them, including our supplier code of conduct, we do not control the conduct of these third parties.
Although we have policies and procedures to address compliance with the FCPA and similar laws and sanctions requirements, there can be no assurance that all of our employees, contractors, agents and other partners will not take actions in violations of our policies or that our procedures will effectively mitigate against such risks.
Although we have policies and procedures to address compliance with the FCPA and similar laws and sanctions requirements, there can be no assurance that all of our employees, contractors, agents and other 20 Table of Contents partners will not take actions in violations of our policies or that our procedures will effectively mitigate against such risks.
As a result of this heightened scrutiny, we may experience an increase in income tax audits. In addition, prior decisions by tax authorities regarding treatments and positions of corporate income taxes could be subject to enforcement activities and/or legislative investigation, which could also result in changes in tax policies or prior tax rulings.
As a result of this heightened scrutiny, we may experience an increase in income tax audits. In addition, prior decisions by tax authorities regarding treatments and positions of corporate income taxes could be subject to enforcement activities and/or legislative investigation, which could also result in changes in tax policies or prior tax 21 Table of Contents rulings.
Our inability to compete successfully against our competitors and maintain our gross margin could have a negative effect on our brand image and a material adverse effect on our business, financial condition and results of operations. 11 Table of Contents Our profitability may decline or our growth may be negatively impacted as a result of increasing pressure on pricing.
Our inability to compete successfully against our competitors and maintain our gross margin could have a negative effect on our brand image and a material adverse effect on our business, financial condition and results of operations. Our profitability may decline or our growth may be negatively impacted as a result of increasing pressure on pricing.
For further discussion of the material weaknesses, see Part II, Item 9A, “Controls and Procedures.” As a consequence of these material weaknesses, we have also determined that our disclosure controls and procedures were ineffective. We are actively engaged in the planning for, and implementation of, remediation efforts to address the material weaknesses.
For further discussion of the material weakness, see Part II, Item 9A, “Controls and Procedures.” As a consequence of the material weakness, we have also determined that our disclosure controls and procedures were ineffective. We are actively engaged in the planning for, and implementation of, remediation efforts to address the material weakness.
Pursuant to the rules and regulations of the SEC regarding compliance with Section 404 of the Sarbanes-Oxley Act of 2002, we are required to report on, and our independent registered public accounting firm is required to attest to, the effectiveness of our internal control over financial reporting.
Pursuant to the rules and regulations of the SEC regarding compliance with Section 404 of the Sarbanes-Oxley Act of 2002, we are required to report on, and our independent registered public accounting firm is required to 22 Table of Contents attest to, the effectiveness of our internal control over financial reporting.
Addressing regulatory requirements and market practices in certain regions outside of North America is challenging, and we may face difficulties expanding into and successfully operating in those markets, including differences in regulatory environments, labor and market practices, and difficulties in keeping abreast of market, business and technical developments and consumers' tastes and preferences.
Addressing regulatory requirements and market practices in certain regions outside of North America is challenging, and we may face difficulties expanding into and successfully operating in those markets, including differences in regulatory environments, labor and market practices, and difficulties in keeping abreast of market, business and technical developments and consumer preferences.
Despite our strategic enforcement 22 Table of Contents efforts, we may not be able to adequately prevent infringement of our trademarks and proprietary rights by others, including imitation of our products and misappropriation of our brand, and intellectual property protection may be unavailable or limited in some jurisdictions.
Despite our strategic enforcement efforts, we may not be able to adequately prevent infringement of our trademarks and proprietary rights by others, including imitation of our products and misappropriation of our brand, and intellectual property protection may be unavailable or limited in some jurisdictions.
If the financial condition of our customers declines, our financial condition and results of operations could be adversely impacted. In Fiscal 2024, sales through our wholesale channel represented approximately 57% of our net revenues. We extend credit to our wholesale customers based on an assessment of a customer's financial condition, generally without requiring collateral or getting customer insurance against non-collection.
If the financial condition of our customers declines, our financial condition and results of operations could be adversely impacted. In Fiscal 2025, sales through our wholesale channel represented approximately 58% of our net revenues. We extend credit to our wholesale customers based on an assessment of a customer's financial condition, generally without requiring collateral or getting customer insurance against non-collection.
In addition, as part of our growth strategy, we are investing significantly in enhancing our online platform capabilities and establishing and growing consumer loyalty programs in certain regions. We are also investing in capabilities and tools to drive higher digital engagement with our consumers and create new digital experiences.
In addition, as part of our growth strategy, we are investing significantly in enhancing our digital shopping capabilities and establishing and growing consumer loyalty programs in certain regions. We are also investing in capabilities and tools to drive higher digital engagement with our consumers and create new digital experiences.
As a result of these seasonal and quarterly fluctuations, we believe that comparisons of our operating results between different quarters within a single year are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of our future performance.
As a result of these seasonal and quarterly fluctuations, we believe that comparisons of our operating results between different quarters within a single year are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of our future 19 Table of Contents performance.
Additionally, from time to time, we may invest in business infrastructure, new businesses and expansion of existing businesses, such as the expansion of our network of Brand and Factory House stores and our distribution facilities, implementing our global operating and financial reporting information technology system, supporting our digital strategy (including our e-commerce platform and loyalty programs), or supporting our corporate infrastructure (including the development of our new global headquarters located in the Baltimore Peninsula, an area of Baltimore previously referred to as Port Covington).
Additionally, from time to time, we may invest in business infrastructure, new businesses and expansion of existing businesses, such as the expansion of our network of Brand and Factory House stores and our distribution facilities, implementing our global operating and financial reporting information technology system, supporting our digital strategy (including our e-commerce platform and loyalty programs), or supporting our corporate infrastructure (including the development of our new global headquarters located in the Baltimore Peninsula area of Baltimore).
However, as competition in the performance apparel and footwear industry has increased, the costs associated with athlete sponsorships and official supplier licensing agreements, including the costs of obtaining and retaining these 17 Table of Contents sponsorships and agreements, have varied and at times increased greatly.
However, as competition in the performance apparel and footwear industry has increased, the costs associated with athlete sponsorships and official supplier licensing agreements, including the costs of obtaining and retaining these sponsorships and agreements, have varied and at times increased greatly.
Failure to remediate these material weaknesses, or any other material weaknesses that we may identify in the future, could result in material misstatements in our consolidated financial statements, a failure to meet our periodic reporting obligations and a decline in our stock price.
Failure to remediate this material weakness, or any other material weaknesses that we may identify in the future, could result in material misstatements in our consolidated financial statements, a failure to meet our periodic reporting obligations and a decline in our stock price.
Substantially all of our products are manufactured by unaffiliated manufacturers, and, in Fiscal 2024, ten manufacturers produced approximately 68% of our apparel and accessories products, and nine produced substantially all of our footwear products. We have no long-term contracts with our suppliers or manufacturing sources, and we compete with other companies for fabrics, raw materials and production capacity.
Substantially all of our products are manufactured by unaffiliated manufacturers, and, in Fiscal 2025, ten manufacturers produced approximately 69% of our apparel and accessories products, and nine produced substantially all of our footwear products. We have no long-term contracts with our suppliers or manufacturing sources, and we compete with other companies for fabrics, raw materials and production capacity.
Our ability to continue to borrow amounts under our amended credit agreement is limited by continued compliance with these financial covenants, and in the past we have amended our credit agreement to provide certain relief from and revisions to our financial covenants for specified periods to provide us 19 Table of Contents with sufficient access to liquidity during those periods.
Our ability to continue to borrow amounts under our amended credit agreement is limited by continued compliance with these financial covenants, and in the past we have amended our credit agreement to provide certain relief from and revisions to our financial covenants for specified periods to provide us with sufficient access to liquidity during those periods.
Any legal proceeding could negatively impact our reputation among our customers or our shareholders. Furthermore, publicity surrounding ongoing legal proceedings, even if resolved favorably for us, could result in additional legal proceedings against us, as well as damage our brand image. We have identified material weaknesses in our internal control over financial reporting as of March 31, 2024.
Any legal proceeding could negatively impact our reputation among our customers or our shareholders. Furthermore, publicity surrounding ongoing legal proceedings, even if resolved favorably for us, could result in additional legal proceedings against us, as well as damage our brand image. We have identified a material weakness in our internal control over financial reporting as of March 31, 2025.
Certain customers, consumers, investors and other stakeholders are increasingly focusing on the sustainability and human rights practices of companies, including those related to climate change and diversity, equity and inclusion. If our practices do not meet the expectations of various stakeholders, which can vary greatly and continue to evolve, our brand and reputation could be negatively impacted.
Certain customers, consumers, investors and other stakeholders are increasingly focusing on the sustainability and human rights practices of companies, including those related to climate change and social issues. If our practices do not meet the expectations of various stakeholders, which can vary greatly and continue to evolve, our brand and reputation could be negatively impacted.
From time to time, we may engage in acquisition opportunities we believe are complementary to our business and brand. Integrating acquired businesses can require significant efforts and resources, which could 16 Table of Contents divert management attention from more profitable business operations.
From time to time, we may engage in acquisition opportunities we believe are complementary to our business and brand. Integrating acquired businesses can require significant efforts and resources, which could divert management attention from more profitable business operations.
Any delays, interruption or increased costs in the supply of fabric or manufacture of our products could have an adverse effect on our ability to meet retail customer and consumer demand for our products and result in lower net revenues and net income (or higher net loss) both in the short and long term.
Any delays, interruption or increased costs in the supply of fabric or manufacture of our products could have an adverse effect on our ability to meet retail customer and consumer demand for our products and result in lower net revenues and lower results of operations both in the short and long term.
We cannot predict the outcome of any particular legal proceeding, or whether ongoing legal proceedings will be resolved favorably or ultimately result in charges or material damages, fines or other penalties.
Legal proceedings can be expensive and disruptive. We cannot predict the outcome of any particular legal proceeding, or whether ongoing legal proceedings will be resolved favorably or ultimately result in charges or material damages, fines or other penalties.
We have utilized cash on hand and cash generated from operations, accessed our credit facility and issued debt securities as sources of liquidity. As of March 31, 2024, our cash and cash equivalents totaled $859 million.
We have utilized cash on hand and cash generated from operations, accessed our credit facility and issued debt securities as sources of liquidity. As of March 31, 2025, our cash and cash equivalents totaled $501 million.
These material weaknesses resulted from a failure to design and maintain effective controls over certain aspects of the period-end financial reporting process, including the review and execution of certain balance sheet account reconciliations, and we did not design and maintain effective controls over the classification and 23 Table of Contents presentation of general ledger accounts in the appropriate financial statement line items within the consolidated financial statements.
This material weakness resulted from a failure to design and maintain effective controls over certain aspects of the period-end financial reporting process, including the review and execution of certain balance sheet account reconciliations, and we did not design and maintain effective controls over the classification and presentation of general ledger accounts in the appropriate financial statement line items within the consolidated financial statements.
We also performed our assessment of the effectiveness of internal control over financial reporting and identified material weaknesses in our internal control over financial reporting.
We also performed our assessment of the effectiveness of internal control over financial reporting and identified a material weakness in our internal control over financial reporting.
From time to time, global macroeconomic factors, such as the COVID-19 pandemic, have caused and may in the future to cause uncertainty in forecasted cash flows, which has resulted and may in the future result in the de-designation of certain hedged transactions.
From time to time, global macroeconomic factors have caused and may in the future to cause uncertainty in forecasted cash flows, which has resulted and may in the future result in the de-designation of certain hedged transactions.
Furthermore, based on its financial performance, our ability to recover our investment in the long term may be limited. 20 Table of Contents Our financial results could be adversely impacted by currency exchange rate fluctuations. During Fiscal 2024, we generated approximately 44% of our consolidated net revenues outside the United States.
Furthermore, based on its financial performance, our ability to recover our investment in the long term may be limited. Our financial results could be adversely impacted by currency exchange rate fluctuations. During Fiscal 2025, we generated approximately 45% of our consolidated net revenues outside the United States.
From time to time, we may also introduce limited run or specialized products that may increase our sales in the near term, but that may fail to maintain sustained consumer demand.
Accordingly, our new products may not receive consumer acceptance. From time to time, we may also introduce limited run or specialized products that may increase our sales in the near term, but that may fail to maintain sustained consumer demand.
Moreover, data privacy laws and regulations continue to evolve and it may be costly for us to adjust our operations to comply with new requirements. Regulatory bodies throughout the world have increased enforcement efforts against companies who fail to comply with privacy requirements.
Compliance with existing laws and regulations can be costly and could negatively impact our profitability. Moreover, data privacy laws and regulations continue to evolve and it may be costly for us to adjust our operations to comply with new requirements. Regulatory bodies throughout the world have increased enforcement efforts against companies who fail to comply with privacy requirements.
In addition, our non-voting Class C common stock has traded at a discount to our Class A common stock, and there can be no assurance that this will not continue. ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable.
In addition, our non-voting Class C common stock has traded at a discount to our Class A common stock, and there can be no assurance that this will not continue.
Significant delays or disruption in receiving and distributing our products, has had, and may again have, an adverse effect on our business, including canceled orders by customers, unanticipated inventory accumulation or shortages, increased expense (including air freight) to deliver our products and reduced net revenues and net income or higher net loss.
Significant delays or disruption in receiving and distributing our products, has had, and may again have, an adverse 15 Table of Contents effect on our business, including canceled orders by customers, unanticipated inventory accumulation or shortages, increased expense (including air freight) to deliver our products and reduced net revenues and results of operations.
The risk that our business partners may not act in accordance with our expectations may be exacerbated in markets where our direct sales, supply chain or logistics operations are not as widespread. In addition, we have sponsorship contracts with a variety of athletes, teams and leagues, and many athletes and teams use our products.
The risk that our business partners may not act in accordance with our expectations may be exacerbated in markets where our direct sales, supply chain or logistics operations are not as widespread. In addition, we have sponsorship contracts with a variety of athletes, teams and leagues and also enter into collaborative arrangements with athletes, designers or other partners.
Many countries in which we have operations are required to, or voluntarily plan to, implement Pillar Two taxes. Many jurisdictions have adopted or announced an intention to adopt Pillar Two for tax years beginning on or after January 1, 2024.
Many jurisdictions in which we have operations have adopted or have announced an intention to adopt Pillar Two for tax years beginning on or after January 1, 2024.
With respect to our direct-to-consumer business, our growth depends on our ability to continue to successfully grow our digital offerings and experiences throughout the world, expand our global network of Brand and Factory House stores and continue to increase our product offerings and market share in footwear successfully.
With respect to our direct-to-consumer business, our growth depends on our ability to continue to successfully grow our digital offerings and experiences throughout the world, expand our global network of Brand and Factory House stores and continue to attract and retain consumers in these channels successfully.
Global and U.S. economic conditions and trends in consumer discretionary spending continue to be uncertain, particularly in light of the potential impacts of inflation volatility in the U.S. and global markets and recession fears.
Global and U.S. economic conditions and trends in consumer discretionary spending continue to be uncertain, particularly in light of the potential impacts of changes and uncertainties related to government fiscal, monetary, tax, and trade policies, inflation volatility in the U.S. and global markets and recession fears.
The COVID-19 pandemic and related government, private sector and individual consumer responsive actions had an adverse impact on our business and results of operations, as well as the businesses and results of operations of our business partners, including our customers, suppliers and vendors.
The COVID-19 pandemic and related government, private sector and individual consumer responsive actions had an adverse impact on our business and results of operations, as well as the businesses and results of operations of our business partners, including our customers, suppliers and vendors. Business and Operational Risks We derive a substantial portion of our sales from large wholesale customers.
Our ability to realize our long-term growth objectives depends, in part, on our ability to successfully execute strategic initiatives in key areas including our wholesale, footwear, women’s and direct-to-consumer businesses.
Our ability to realize our long-term growth objectives depends, in part, on our ability to successfully execute strategic initiatives in key areas including our North America region and our wholesale and direct-to-consumer 12 Table of Contents businesses.
We have developed licensing and sponsorship agreements with a variety of sports teams and athletes at the collegiate and professional level to be their official supplier of performance apparel and footwear. We have also developed licensing agreements to be an official supplier of footwear and/or performance apparel to a variety of professional sports leagues and clubs.
We have also developed licensing agreements to be an official supplier of footwear and/or performance apparel to a variety of professional sports leagues and clubs.
Failure to comply with these regulatory standards could result in a violation of data privacy laws and regulations and subject us to legal proceedings against us by governmental entities or others, imposition of fines by governmental authorities, negative publicity and damage to our brand image, all of which could have a negative impact on our profitability. 21 Table of Contents Data security or privacy breaches could damage our reputation, cause us to incur additional expense, expose us to litigation and adversely affect our business and results of operations.
Failure to comply with these regulatory standards could result in a violation of data privacy laws and regulations and subject us to legal proceedings against us by governmental entities or others, imposition of fines by governmental authorities, negative publicity and damage to our brand image, all of which could have a negative impact on our profitability.
Factors that could affect our ability to accurately forecast demand for our products include: changing consumer demand for our products; product introductions by competitors; unanticipated changes in general market or economic conditions or other factors, which may result in cancellations of advance orders or a reduction or increase in the rate of reorders or at-once orders placed by retailers; the impact on consumer demand due to unseasonable weather conditions, which may become more frequent or severe as a result of climate change; and terrorism or acts of war, or the threat thereof, political or labor instability or unrest or public health concerns and disease epidemics.
On the other hand, if we underestimate the demand for our products, our manufacturers may not be able to produce products to meet our customer requirements, resulting in delays in the shipment of our products and our ability to recognize revenue, lost sales, as well as damage to our reputation and wholesale and consumer relationships. 14 Table of Contents Factors that could affect our ability to accurately forecast demand for our products include: changing consumer demand for our products; product introductions by competitors; unanticipated changes in general market or economic conditions impacting consumer discretionary spending, which may result in cancellations of advance orders or a reduction or increase in the rate of reorders or at-once orders placed by retailers; the impact on consumer demand due to unseasonable weather conditions, which may become more frequent or severe as a result of climate change; and terrorism or acts of war, or the threat thereof, political or labor instability or unrest or public health concerns and disease epidemics.
Any near or long-term economic disruptions in markets where we sell our products, particularly in the United States or other key markets, may materially harm our sales, profitability and financial condition and our prospects for growth.
Any near or long-term economic disruptions in markets where we sell our products, particularly in the United States or other key markets, may materially harm our sales, profitability and financial condition and our prospects for growth. Our financial results and ability to grow our business may be negatively impacted by global events beyond our control.
Any failure, or perceived failure, to meet our targets, commitments or stakeholder expectations or to comply with reporting regulations could harm our reputation, negatively impact our employee retention, the willingness of our suppliers to do business with us or investor interest in our securities, or have a negative effect on our sales and results of operations.
Any failure, or perceived failure, to meet our targets, commitments or stakeholder expectations or to comply with reporting regulations could harm our brand image and reputation, negatively impact our employee retention, the willingness of our suppliers to do business with us or investor interest in our securities, or have a negative effect on our sales and results of operations. 16 Table of Contents The costs and return on our investments for our sports marketing sponsorships may become more challenging and this could impact the value of our brand image.
The value of our brand and sales of our products could be diminished if we are associated with negative publicity. Our business could be adversely impacted if negative publicity regarding our brand, our company or our business partners diminishes the appeal of our brand to consumers.
Our business could be adversely impacted if negative publicity regarding our brand, our company or our business partners diminishes the appeal of our brand to consumers.
The extent of the impact of any future public health emergency on our business will depend on several uncertain and unpredictable factors, including the duration, spread and severity of such public health emergency. Business and Operational Risks We derive a substantial portion of our sales from large wholesale customers.
The extent of the impact of any future public health emergency on our business will depend on several uncertain and unpredictable factors, including the duration, spread and severity of such public health emergency.
We must also comply with increasingly complex and evolving regulatory standards throughout the world enacted to protect personal information and other data, including the General Data Protection Regulation, the ePrivacy Directive, the California Consumer Privacy Act of 2018, the California Privacy Rights Act, state privacy laws in Colorado, Connecticut, Florida, Montana, Oregon, Texas, Utah and Virginia and the Personal Information Protection Law in China.
We must also comply with increasingly complex and evolving regulatory standards throughout the world enacted to protect personal information and other data, including the General Data Protection Regulation, the ePrivacy Directive, the California Consumer Privacy Act of 2018, the California Privacy Rights Act, the final rule issued by the U.S.
Negative publicity regarding these partners or legal or regulatory matters could negatively impact our brand image and result in diminished loyalty to our brand, regardless of whether such claims are accurate. Furthermore, social media can potentially accelerate and increase the scope of negative publicity.
Negative publicity regarding our initiatives or practices related to these issues could negatively impact our brand and result in diminished loyalty to our brand. Furthermore, social media can potentially accelerate and increase the scope of negative publicity.
The majority of our net revenues are historically generated during the last two quarters of the calendar year. Our quarterly results of operations may also fluctuate significantly as a result of a variety of other factors, including the timing of our customer orders, our ability to timely delivery, the timing of marketing expenses and changes in our product mix.
Our quarterly results of operations may also fluctuate significantly as a result of a variety of other factors, including the timing of our customer orders, our ability to timely deliver, the timing of marketing and advertising costs and changes in our product mix.
A failure to accurately predict the level of demand for our products could adversely impact our profitability or cause us not to achieve our expected financial results. 15 Table of Contents We rely on third-party suppliers and manufacturers to provide raw materials for and to produce our products, and we have limited control over these suppliers and manufacturers and may not be able to obtain quality products on a timely basis or in sufficient quantity.
We rely on third-party suppliers and manufacturers to provide raw materials for and to produce our products, and we have limited control over these suppliers and manufacturers and may not be able to obtain quality products on a timely basis or in sufficient quantity.
If we cannot effectively execute our long-term growth strategies while managing costs effectively, our business could be negatively impacted and we may not achieve our expected results of operations. 13 Table of Contents If we are unable to anticipate consumer preferences, successfully develop and introduce new, innovative and updated products or engage our consumers, or if consumer preferences shift away from performance products, our sales, net revenues and profitability may be negatively impacted.
If we are unable to anticipate consumer preferences; successfully develop and introduce new, innovative and updated products or engage our consumers; or if consumer preferences shift away from performance products, our sales, net revenues and profitability may be negatively impacted.
Significant price fluctuations, including due to inflation, trade relations, sanctions, or other geopolitical or economic conditions, or shortages in petroleum or other raw materials can materially adversely affect our cost of goods sold. In addition, certain of our manufacturers are subject to government regulations related to wage rates, and therefore the labor costs to produce our products may fluctuate.
Significant price fluctuations, including due to inflation, tariffs or trade relations, sanctions, or other geopolitical or economic conditions, or shortages in petroleum or other raw materials can materially adversely affect our cost of goods sold.
The difficulty in forecasting demand also makes it difficult to estimate our future results of operations and financial condition from period to period.
The difficulty in forecasting demand also makes it difficult to estimate our future results of operations and financial condition from period to period. A failure to accurately predict the level of demand for our products could adversely impact our profitability or cause us not to achieve our expected financial results.
Remediation and repair of any failure, problem or breach of our key systems or known potential vulnerabilities could require significant capital investments, as well as divert resources and management attention from key projects or initiatives. While we have purchased cybersecurity insurance, there can be no assurance that the coverage would be adequate in relation to any incurred losses.
Remediation and repair of any failure, problem or breach of our key systems or 17 Table of Contents known potential vulnerabilities could require significant capital investments, as well as divert resources and management attention from key projects or initiatives.
If we fail to achieve targeted operating improvements and/or cost reductions, our profitability and results of operations could be negatively impacted, which may be dilutive to our earnings in the short term.
If we fail to achieve targeted operating improvements and/or cost reductions, our profitability and results of operations could be negatively impacted, which may be dilutive to our earnings in the short term. 18 Table of Contents Financial Risks Our credit agreement contains financial covenants, and both our credit agreement and debt securities contain other restrictions on our actions, which could limit our operational flexibility or otherwise adversely affect our financial condition.
In addition, we may from time to time exit or scale down relationships with certain wholesale customers to further drive our premium brand position or for other reasons. This may negatively impact our net revenues if we are unable to replace those sales with additional sales to our other customers or direct sales to consumers.
In addition, from time to time, we have and may continue to exit or scale down relationships with certain wholesale customers to further drive our premium brand position or for 13 Table of Contents other reasons.
Our Senior Notes limit our ability to, subject to certain significant exceptions, incur secured debt and engage in sale leaseback transactions.
We have, from time to time, financed our liquidity needs in part from borrowings made under our credit facility and the issuance of debt securities. Our Senior Notes limit our ability to, subject to certain significant exceptions, incur secured debt and engage in sale leaseback transactions.
In the event that one or more of these factors make it undesirable or impractical for us to conduct business in a particular country, our business could be adversely affected. 12 Table of Contents Global or regional public health emergencies, such as the COVID-19 pandemic, have caused and may in the future cause significant disruption in our industry, which has had and may in the future have a material or adverse impact our business, financial condition and results of operations.
Global or regional public health emergencies have caused and may in the future cause significant disruption in our industry, which has had and may in the future have a material or adverse impact our business, financial condition and results of operations.
We may not fully realize the expected benefits of our restructuring plans or other operating or cost-saving initiatives, which may negatively impact our profitability. We have recently announced a restructuring plan designed to more closely align our financial resources against the critical priorities of our business and rebalance our cost base to further improve future profitability and cash flow generation.
We may not fully realize the expected benefits of our restructuring plans or other operating or cost-saving initiatives, which may negatively impact our profitability. We are currently executing a restructuring plan designed to strengthen and support our financial and operational efficiencies.
Our long-term strategy also depends on our ability to successfully drive expansion of our gross margins, manage and leverage our cost structure and drive return on our investments.
Our long-term strategy also depends on our ability to successfully drive expansion of our gross margins, manage and leverage our cost structure and drive return on our investments. If we cannot effectively execute our long-term growth strategies while managing costs effectively, our business could be negatively impacted and we may not achieve our expected results of operations.
These laws and related regulations impact our ability to engage with our consumers, and some of these privacy laws prohibit the transfer of personal information to certain other jurisdictions. Compliance with existing laws and regulations can be costly and could negatively impact our profitability.
Department of Justice implementing Executive Order 14117, state privacy laws throughout the United States and the Personal Information Protection Law in China. These laws and related regulations impact our ability to engage with our consumers, and some of these privacy laws prohibit the transfer of personal information to certain other jurisdictions.
It is possible that stakeholders may not be satisfied with such disclosures, practices, targets or commitments or the speed or success of their adoption. We may incur additional costs, face market and technological barriers, require additional resources or change investment decisions, which may require us to adjust or restate some or all of our targets and commitments.
It is possible that stakeholders may not be satisfied with such disclosures, practices, targets or commitments or the speed or success of their adoption.
If we experience any significant disruption to our financial information systems that we are unable to mitigate, our ability to timely report our financial results could be impacted, which could negatively impact our stock price. 18 Table of Contents Our future success is substantially dependent on the continued service of our senior management and other key employees, and our continued ability to attract and retain highly talented new team members.
Our future success is substantially dependent on the continued service of our senior management and other key employees, and our continued ability to attract and retain highly talented new team members.
Moreover, as cyber attacks increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as appropriate for our operations. We also heavily rely on information systems to process financial and accounting information for financial reporting purposes.
While we have purchased cybersecurity insurance, there can be no assurance that the coverage would be adequate in relation to any incurred losses. Moreover, as cyber attacks increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as appropriate for our operations.
The cost of transporting our products for distribution and sale is also subject to fluctuation due in large part to the price of oil. Because most of our products are manufactured abroad, our products must be transported by third parties over large geographical distances and an increase in the price of oil can significantly increase costs.
Because most of our products are manufactured abroad, our products must be transported by third parties over large geographical distances and an increase in the price of oil can significantly increase costs. Manufacturing delays or unexpected transportation delays have caused and may continue to cause us to rely more heavily on airfreight to achieve timely delivery to our customers.
In addition, consumers are increasingly focused on the environmental and social practices of brands, including the sustainability of the products sold. Our ability to adequately react to and address consumer preferences depends in part upon our continued ability to develop and introduce innovative, high-quality products and to optimize available consumer data.
Our ability to adequately react to and address consumer preferences depends in part upon our continued ability to develop and introduce innovative, high-quality products and to optimize available consumer data. In addition, long lead times for certain of our products may make it hard for us to respond quickly to changes in consumer demands.
Any of these fluctuations may increase our cost of products and have an adverse effect on our profit margins, results of operations and financial condition. Our financial results and ability to grow our business may be negatively impacted by global events beyond our control.
These factors have significantly increased our freight costs in the past, and may do so again in the future. Any of these fluctuations may increase our cost of products and have an adverse effect on our profit margins, results of operations and financial condition.
The costs and return on our investments for our sports marketing sponsorships may become more challenging and this could impact the value of our brand image. A key element of our marketing strategy has been to create a link in the consumer market between our products and professional, collegiate and young athletes.
A key element of our marketing strategy has been to create a link in the consumer market between our products and professional, collegiate and young athletes. We have developed licensing and sponsorship agreements with a variety of sports teams and athletes at the collegiate and professional level to be their official supplier of performance apparel and footwear.
We collect proprietary business information and personally identifiable information in connection with digital marketing, digital commerce, our in-store payment processing systems and our digital business (including our MapMyFitness platform). We collect and store a variety of information regarding our consumers, and on some of our platforms allow users to share their personal information with each other and with third parties.
Data security or privacy breaches could damage our reputation, cause us to incur additional expense, expose us to litigation and adversely affect our business and results of operations. We collect proprietary business information and personally identifiable information in connection with digital marketing, digital commerce, and our in-store payment processing systems.
Removed
Manufacturing delays or unexpected transportation delays have caused and may continue to cause us to rely more heavily on airfreight to achieve timely delivery to our customers. These factors have significantly increased our freight costs in the past, and may do so again in the future.
Added
In the event that one or more of these factors make it undesirable or impractical for us to conduct business in a particular country, our business could be adversely affected. There continues to be uncertainty in the current global trade environment due to recent and potential changes in global trade policy.
Removed
For example, the COVID-19 pandemic reduced consumer traffic; negatively impacted the operation of our and our wholesale customers’ retail stores; caused global logistical challenges, including increased freight costs, shipping container shortages, transportation delays, labor shortages and port congestion; negatively impacted our cash generated from operations during certain periods; and led to significant volatility in the capital markets, which adversely impacted our stock price.
Added
These changes have and could result in a higher cost or restrictions on the 10 Table of Contents importation of the products we sell.
Removed
In addition, long lead times for certain of our products may make it hard for us to respond quickly to changes in consumer demands. Accordingly, our new products may not receive consumer acceptance.
Added
Although we have and may continue to look for alternative sourcing options, we may not be able to shift production in a timely or cost-effective manner, if at all, from various countries in which we manufacture our products to offset those costs or restrictions.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe maintain a cybersecurity program designed to detect, identify, classify and mitigate cybersecurity and other data security threats, which is aligned to and informed by our ERM program.
Biggest changeWe maintain a cybersecurity program designed to detect, identify, classify and mitigate cybersecurity and other data security threats, which is aligned to and informed by our ERM program. Our cybersecurity program takes into consideration, among other things, compliance requirements, risks to our revenue channels, risks posed by third-party engagements, consumer and employee data security and global enterprise security.
We also maintain cyber liability insurance to help defray any financial losses arising out of a cyber security incident; our insurance, however, may not cover all types of cybersecurity incidents or all losses that we incur. We have adopted, and periodically review and update, information security and privacy notices, policies and procedures.
We also maintain cyber liability insurance to help defray financial losses arising out of a cyber security incident; our insurance, however, may not cover all types of cybersecurity incidents or all losses that we incur. We have adopted, and periodically review and update, information security and privacy notices, policies and procedures.
For additional information regarding the threats we face, see "Risk Factors—Business and Operational Risks— If we encounter problems with our distribution system, our ability to deliver our products to the market could be adversely affected "; " —We rely significantly on information technology and any failure, inadequacy or interruption of that technology could harm our ability to effectively operate our business "; and "—Legal, Regulatory and Compliance Risks— Data security or privacy breaches could damage our reputation, cause us to incur additional expense, expose us to litigation and adversely affect our business and results of operations " included in Part I, Item 1A of this Annual Report on Form 10-K.
For additional information regarding the threats we face, see "Risk Factors—Business and Operational Risks— If we encounter problems with our distribution system, our ability to deliver our products to the market could be adversely affected "; " —We rely significantly on information technology and any failure, inadequacy or interruption of that technology could harm our ability to effectively operate our business "; and "—Legal, Regulatory and Compliance Risks— Data security or privacy breaches could damage our reputation, cause us to incur additional 24 Table of Contents expense, expose us to litigation and adversely affect our business and results of operations " included in Part I, Item 1A of this Annual Report on Form 10-K.
In addition, we engage a third-party vendor to conduct 24/7 monitoring of cybersecurity alerts.
We engage independent third parties to conduct regular penetration testing and targeted security audits of our information systems. In addition, we engage a third-party vendor to conduct 24/7 monitoring of cybersecurity alerts.
Removed
Our cybersecurity program takes into consideration, among other things, compliance requirements, risks to our revenue channels, risks posed by third-party engagements, consumer and employee data security and 24 Table of Contents global enterprise security. We engage independent third parties to conduct regular penetration testing and targeted security audits of our information systems.
Removed
In addition, members of our management team conduct an enterprise-wide internal risk assessment through our ERM program that is updated annually and reviewed and discussed by the Audit Committee. This risk assessment is designed to identify our most material risks, including cybersecurity risks, for evaluation and monitoring.

Item 2. Properties

Properties — owned and leased real estate

5 edited+1 added−2 removed0 unchanged
Biggest changeFor each of our EMEA, Latin America and Asia-Pacific headquarters, we lease office space. We lease our primary distribution facilities, which are located in Sparrows Point, Maryland, Mount Juliet, Tennessee and Rialto, California. Combined, these facilities represent approximately 3.5 million square feet of facility space.
Biggest changeWe lease our primary distribution facilities, which are located in Sparrows Point, Maryland, Mount Juliet, Tennessee and Rialto, California. Combined, these facilities represent approximately 3.5 million square feet of facility space. These leases expire at various dates, with the earliest lease termination date occurring in December 2027.
As of March 31, 2024, we leased 440 Brand and Factory House retail stores located primarily in the United States, China, Canada, Mexico, Korea, Australia, the United Kingdom and Malaysia with lease termination dates occurring in 2024 through 2038. We also lease additional office space for sales, quality assurance and sourcing, marketing and administrative functions.
As of March 31, 2025, we leased 441 Brand and Factory House retail stores located primarily in the United States, China, Canada, Mexico, the United Kingdom, South Korea, Australia, and Thailand with lease termination dates occurring through 2038. We also lease additional office space for sales, quality assurance and sourcing, marketing and administrative functions.
We anticipate that we will be able to extend these leases that expire in the near future on satisfactory terms or relocate to other locations. Third-Party Operated We have distribution centers which are leased and operated by third-party logistics providers in Canada, the United Kingdom, Netherlands, Hong Kong and Panama.
We anticipate that we will be able to extend these leases that expire in the near future on satisfactory terms or relocate to other locations. Third-Party Operated We partner with third-party logistics providers who operate distribution centers in international markets including Canada, Mexico, Panama, the United Kingdom, Netherlands, Hong Kong and China.
ITEM 2. PROPERTIES 25 Table of Contents The following includes a summary of the principal properties that we own or lease as of March 31, 2024. Company Operated Our principal executive and administrative offices are located at an office complex in Baltimore, Maryland, the majority of which we own and a portion of which we lease.
ITEM 2. PROPERTIES The following includes a summary of the principal properties that we own or lease as of March 31, 2025. Company Operated During Fiscal 2025, we moved our principal executive and administrative offices to an office complex that we own in the Baltimore Peninsula, an area of Baltimore, Maryland.
These leases expire at various dates, with the earliest lease termination date occurring in December 2027. We believe our distribution facilities and space available through our third-party logistics providers, described below, will be adequate to meet our short term needs.
However, as previously disclosed, we have made the decision to exit our distribution facility located in Rialto, California, by March 2026, as part of our 2025 restructuring plan. We believe our distribution facilities and space available through our third-party logistics providers, described below, will be adequate to meet our short term needs.
Removed
We also own office space and undeveloped acreage in the Baltimore Peninsula, an area of Baltimore, Maryland previously referred to as Port Covington, which we are in the process of renovating and further developing. We expect to move our principal executive and administrative offices to this location by late 2024.
Added
We continue to own office space in Baltimore, Maryland, where our previous principal executive and administrative offices were located. We are currently evaluating potential options for this space. For each of our EMEA, Latin America and Asia-Pacific headquarters, we lease office space.
Removed
During Fiscal 2024, we entered into an agreement with a new third-party logistics provider to operate a distribution center in the Netherlands, which is expected to commence in February 2026.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we have been involved in litigation and other proceedings, including matters related to commercial disputes and intellectual property, as well as trade, regulatory and other claims related to our business.
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we have been involved in litigation and other proceedings, including matters related to commercial disputes and intellectual property, as well as trade, regulatory and other claims related to our business. See Note 10 to our Consolidated Financial Statements for information on certain legal proceedings, which is incorporated by reference herein.
Removed
See Note 10 to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for information on certain legal proceedings, which is incorporated by reference herein. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 26 Table of Contents PART II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−1 removed3 unchanged
Biggest changeHowever, if we were to consider declaring a cash dividend to our stockholders, we may be limited in our ability to do so under our credit facility.
Biggest changeWe currently anticipate we will retain future earnings for use in our business, and as a result, we do not anticipate paying any cash dividends in the foreseeable future. However, if we were to consider declaring a cash dividend to our stockholders, we may be limited in our ability to do so under our credit facility.
Refer to "Financial Position, Capital Resources and Liquidity" within Management's Discussion and Analysis, included in Part II, Item 7 of this Annual Report on Form 10-K and Note 9 to the Consolidated Financial Statements , included in Part II, Item 8 of this Annual Report on Form 10-K, for a further discussion of our credit facility.
Refer to "Liquidity and Capital Resources" within Management's Discussion and Analysis, included in Part II, Item 7 of this Annual Report on Form 10-K and Note 9 to the Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K, for a further discussion of our credit facility.
Class A Common Stock to the cumulative total return of the S&P 500 Index and S&P 500 Apparel, Accessories and Luxury Goods Index from December 31, 2018 through March 31, 2024. The graph assumes an initial investment of $100 in Under Armour and each index as of December 31, 2018 and reinvestment of any dividends.
Class A Common Stock to the cumulative total return of the S&P 500 Index and S&P 500 Apparel, Accessories and Luxury Goods Index from December 31, 2019 through March 31, 2025. The graph assumes an initial investment of $100 in Under Armour and each index as of December 31, 2019 and reinvestment of any dividends.
As of May 15, 2024, there were 2,176 record holders of our Class A Common Stock, 5 record holders of Class B Convertible Common Stock which are beneficially owned by our President and Chief Executive Officer, Kevin A. Plank, and 1,432 record holders of our Class C Common Stock.
As of May 15, 2025, there were 2,197 record holders of our Class A Common Stock, 5 record holders of Class B Convertible Common Stock which are beneficially owned by our President and Chief Executive Officer, Kevin A. Plank, and 1,420 record holders of our Class C Common Stock.
Our Class C Common Stock was listed on the NYSE under the symbol "UA.C" since its initial issuance on April 8, 2016 until December 6, 2016 and under the symbol "UA" since December 7, 2016. Unregistered Sales of Equity Securities and Use of Proceeds None.
Our Class C Common Stock was listed on the NYSE under the symbol "UA.C" since its initial issuance on April 8, 2016 until December 6, 2016 and under the symbol "UA" since December 7, 2016.
The performance shown on the graph below is not intended to forecast or be indicative of possible future performance of our common stock. 27 Table of Contents 12/31/2018 12/31/2019 12/31/2020 12/31/2021 3/31/2022 3/31/2023 3/31/2024 Under Armour, Inc. $ 100.00 $ 122.24 $ 97.17 $ 119.92 $ 96.32 $ 53.70 $ 41.75 S&P 500 $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 191.15 $ 176.38 $ 229.08 S&P 500 Apparel, Accessories & Luxury Goods $ 100.00 $ 123.24 $ 110.47 $ 117.17 $ 96.95 $ 67.17 $ 57.12 ITEM 6. [RESERVED] Not applicable.
The performance shown on the graph below is not intended to forecast or be indicative of possible future performance of our common stock. 26 Table of Contents 12/31/2019 12/31/2020 12/31/2021 3/31/2022 3/31/2023 3/31/2024 3/31/2025 Under Armour, Inc. $ 100.00 $ 79.49 $ 98.10 $ 78.79 $ 43.93 $ 34.16 $ 28.92 S&P 500 $ 100.00 $ 118.40 $ 152.39 $ 145.38 $ 134.14 $ 174.23 $ 188.60 S&P 500 Apparel, Accessories & Luxury Goods $ 100.00 $ 89.64 $ 95.08 $ 78.67 $ 54.51 $ 46.35 $ 42.36 ITEM 6. [RESERVED] Not applicable.
Removed
Dividends No cash dividends were declared or paid during Fiscal 2024, Fiscal 2023, Fiscal 2021 or the Transition Period on any class of our common stock. We currently anticipate we will retain future earnings for use in our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future.
Added
Unregistered Sales of Equity Securities and Use of Proceeds The following table sets forth the Company's repurchases of Class C Common Stock during the three months ended March 31, 2025 under the three-year $500 million share repurchase program authorized by the Company's Board of Directors in May 2024.
Added
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of a Publicly Announced Program Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (in millions) 01/01/2025 to 01/31/2025 — $ — — $ 435.0 02/01/2025 to 02/28/2025 — $ — — $ 435.0 03/01/2025 to 03/31/2025 4,055,084 $ 6.17 4,055,084 $ 410.0 Dividends No cash dividends were declared or paid during Fiscal 2025, Fiscal 2024, or Fiscal 2023 on any class of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

103 edited+37 added−31 removed37 unchanged
Biggest changeThe following tables set forth key components of our results of operations for the periods indicated, both in dollars and as a percentage of net revenues: (In thousands) Year Ended March 31, 2024 2023 Net revenues $ 5,701,879 $ 5,903,165 Cost of goods sold 3,071,626 3,259,334 Gross profit 2,630,253 2,643,831 Selling, general and administrative expenses 2,400,502 2,380,245 Income (loss) from operations 229,751 263,586 Interest income (expense), net 268 (12,826) Other income (expense), net 32,055 17,096 Income (loss) before income taxes 262,074 267,856 Income tax expense (benefit) 30,006 (108,645) Income (loss) from equity method investments (26) (2,042) Net income (loss) $ 232,042 $ 374,459 Year Ended March 31, (As a percentage of net revenues) 2024 2023 Net revenues 100.0 % 100.0 % Cost of goods sold 53.9 % 55.2 % Gross profit 46.1 % 44.8 % Selling, general and administrative expenses 42.1 % 40.3 % Income (loss) from operations 4.0 % 4.5 % Interest income (expense), net — % (0.2) % Other income (expense), net 0.6 % 0.3 % Income (loss) before income taxes 4.6 % 4.5 % Income tax expense (benefit) 0.5 % (1.8) % Income (loss) from equity method investments — % — % Net income (loss) 4.1 % 6.3 % Revenues Net revenues consist of net sales, license revenues, and revenues from digital subscriptions, digital advertising and other digital business opportunities.
Biggest changeThis could materially impact our sales, profitability, results of operations and financial condition "; "— Fluctuations in the cost of raw materials and commodities we use in our products and costs related to our supply chain could negatively affect our operating results "; "— Our financial results and ability to grow our business may be negatively impacted by global events beyond our control "; and "—Financial Risks— Our financial results could be adversely impacted by currency exchange rate fluctuations" included in Item 1A of this Annual Report on Form 10-K. 29 RESULTS OF OPERATIONS The following tables set forth key components of our results of operations for the periods indicated, both in dollars and as a percentage of net revenues: (In thousands) Year Ended March 31, 2025 2024 Net revenues $ 5,164,310 $ 5,701,879 Cost of goods sold 2,689,566 3,071,626 Gross profit 2,474,744 2,630,253 Selling, general and administrative expenses 2,601,991 2,400,502 Restructuring charges 57,969 — Income (loss) from operations (185,216) 229,751 Interest income (expense), net (6,115) 268 Other income (expense), net (13,431) 32,055 Income (loss) before income taxes (204,762) 262,074 Income tax expense (benefit) (2,890) 30,006 Income (loss) from equity method investments 605 (26) Net income (loss) $ (201,267) $ 232,042 Year Ended March 31, (As a percentage of net revenues) 2025 2024 Net revenues 100.0 % 100.0 % Cost of goods sold 52.1 % 53.9 % Gross profit 47.9 % 46.1 % Selling, general and administrative expenses 50.4 % 42.1 % Restructuring charges 1.1 % — % Income (loss) from operations (3.6) % 4.0 % Interest income (expense), net (0.1) % — % Other income (expense), net (0.3) % 0.6 % Income (loss) before income taxes (4.0) % 4.6 % Income tax expense (benefit) (0.1) % 0.5 % Income (loss) from equity method investments — % — % Net income (loss) (3.9) % 4.1 % Revenues Net revenues consist of net sales and license revenues.
The amended credit agreement implemented SOFR as the replacement for LIBOR as a benchmark interest rate for the U.S. dollar borrowings (and analogous benchmark rate replacements for borrowings in Yen, Pound Sterling and Euro).
The amended credit agreement implemented SOFR as the replacement for LIBOR as a benchmark interest rate for U.S. dollar borrowings (and analogous benchmark rate replacements for borrowings in Yen, Pound Sterling and Euro).
We continually evaluate whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets may warrant revision or that the remaining balance may not be recoverable. These factors may include a significant deterioration of operating results, changes in business plans, or changes in anticipated cash flows.
Long-Lived Assets We continually evaluate long-lived assets and whether events and circumstances have occurred that indicate the remaining estimated useful life may warrant revision or that the remaining balance may not be recoverable. These factors may include a significant deterioration of operating results, changes in business plans, or changes in anticipated cash flows.
The applicable margin for loans will be adjusted by reference to a grid (the "pricing grid") based on the leverage ratio of consolidated total indebtedness to consolidated EBITDA and ranges between 1.00% to 1.75% (or, in the case of alternate base rate loans 0.00% to 0.75%).
The applicable margin for loans will be adjusted by reference to a grid (the "pricing grid") based on the leverage ratio of consolidated total indebtedness to consolidated EBITDA and ranges between 1.00% to 1.75% (or, in the case of alternate base loans 0.00% to 0.75%).
We also continue to monitor the broader impacts of conflicts around the world on the economy, including its effect on inflationary pressures and the price of oil globally. See "Risk Factors—Economic and Industry Risks— Our business depends on consumer purchases of discretionary items, which can be negatively impacted during an economic downturn or periods of inflation.
We also continue to monitor the broader impacts of conflicts around the world on the economy, including their effect on inflationary pressures and the price of oil globally. See "Risk Factors—Economic and Industry Risks— Our business depends on consumer purchases of discretionary items, which can be negatively impacted during an economic downturn or periods of inflation.
The amended credit agreement provides for an aggregate $1.1 billion of revolving credit commitments comprised of two tranches: (i) one tranche of $50 million that has a term that ends on December 3, 2026, and (ii) a second tranche of $1.05 billion that has a term that ends on December 3, 2027, in each case with permitted extensions under certain circumstances.
The amended credit agreement provides for an aggregate $1.1 billion of revolving credit commitments comprised of two tranches: (i) one tranche of $50 million that has a term that ends on December 3, 2026, and (ii) a second tranche of $1.05 billion that has a term that ends on December 3, 2028, in each case with permitted extensions under certain circumstances.
As of March 31, 2024 and March 31, 2023, there were no amounts outstanding under the revolving credit facility. At our request and a lender's consent, commitments under the amended credit agreement may be increased by up to $300.0 million in aggregate, subject to certain conditions as set forth in the amended credit agreement.
As of March 31, 2025 and March 31, 2024, there were no amounts outstanding under the revolving credit facility. At our request and a lender's consent, commitments under the amended credit agreement may be increased by up to $300.0 million in aggregate, subject to certain conditions as set forth in the amended credit agreement.
Borrowings under the amended credit agreement bear interest at a rate per annum equal to, at our option, either (a) an alternate base rate (for borrowings in U.S. dollars), (b) a term rate (for borrowings in U.S. dollars, Euros or Japanese Yen) or (c) a "risk free" rate (for borrowings in U.S. dollars or Pounds Sterling), plus in each case an applicable margin.
Borrowings under the amended credit agreement bear interest at a rate per annum equal to, at our option, either (a) an alternate base rate (for borrowings in U.S. dollars), (b) a term rate (for borrowings in U.S. dollars, Euro or Japanese Yen) or (c) a "risk free" rate (for borrowings in U.S. dollars or Pounds Sterling), plus in each case an applicable margin.
Stock-Based Compensation The assumptions used in calculating the fair value of stock-based compensation awards represent management’s best estimates, but the estimates involve inherent uncertainties and the application of management judgment. In addition, compensation expense for performance-based awards is recorded over the related service period when achievement of the performance targets is deemed probable, which requires management judgment.
Stock-Based Compensation The assumptions used in calculating the fair value of stock-based compensation awards represent management’s best estimates, but the estimates involve inherent uncertainties and the application of management judgment. In addition, compensation expense for performance-based awards with performance conditions is recorded over the related service period when achievement of the performance targets is deemed probable, which requires management judgment.
The indenture governing the Senior Notes contains covenants, including limitations that restrict our ability and the ability of certain of our subsidiaries to create or incur secured indebtedness and enter into sale and 39 Table of Contents leaseback transactions and our ability to consolidate, merge or transfer all or substantially all of our properties or assets to another person, in each case subject to material exceptions described in the indenture.
The indenture governing the Senior Notes contains covenants, including limitations that restrict our ability and the ability of certain of our subsidiaries to create or incur secured indebtedness and enter into sale and leaseback transactions and our ability to consolidate, merge or transfer all or substantially all of our properties or assets to another person, in each case subject to material exceptions described in the indenture.
Refer to Note 17 to the Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K, for a further discussion of our uncertain tax positions.
Refer to Note 18 to the Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K, for a further discussion of our uncertain tax positions.
Securities Act of 1933, as amended ("the Securities Act"), and is subject to the safe harbors created by those sections. All statements other than statements of historical facts are statements that could be deemed forward-looking statements. See "Forward Looking Statements." All dollar and percentage comparisons made herein refer to Fiscal 2024 compared with Fiscal 2023, unless otherwise noted.
Securities Act of 1933, as amended ("the Securities Act"), and is subject to the safe harbors created by those sections. All statements other than statements of historical facts are statements that could be deemed forward-looking statements. See "Forward Looking Statements." All dollar and percentage comparisons made herein refer to Fiscal 2025 compared to Fiscal 2024, unless otherwise noted.
The amount of product provided to these sponsorships depends on many factors including general playing conditions, the number of sporting events in which they participate and our decisions regarding product and marketing initiatives.
The amount of product provided to these sponsorships depends on many factors including general playing conditions, the number of sporting events in which they participate and our decisions regarding product and marketing 36 Table of Contents initiatives.
We will also pay a commitment fee determined in accordance with the pricing grid on the average daily unused amount of the revolving credit facility and certain fees with respect to letters of credit.
We will also pay a commitment fee 38 Table of Contents determined in accordance with the pricing grid on the average daily unused amount of the revolving credit facility and certain fees with respect to letters of credit.
In conducting an annual impairment test, we first review qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If factors indicate that is the case, we perform a quantitative goodwill impairment test.
In conducting an annual impairment test, we first review qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If factors indicate that is the case, or if we choose to bypass the qualitative assessment, we perform a quantitative goodwill impairment test.
Our long-term operating principle for capital expenditures is to spend between 3% and 5% of annual net revenues as we invest in our global direct-to-consumer, e-Commerce and digital businesses, information technology systems, distribution centers and our global offices, including our new global headquarters in the Baltimore Peninsula, an area of Baltimore, Maryland.
Our long-term operating principle for capital expenditures is to spend between 3% and 5% of annual net revenues as we invest in our global direct-to-consumer, e-commerce and digital businesses, information technology systems, distribution centers and our global offices, including our new global headquarters in the Baltimore Peninsula, an area of Baltimore, Maryland, which we moved into in December 2024.
Other income (expense), net also includes earn-out income recorded in connection with the sale of the MyFitnessPal platform and rent expense relating to lease assets held solely for sublet purposes, primarily the lease related to our New York City, 5th Avenue location.
Other income (expense), net also includes earn-out income recorded in connection with the sale of the 32 Table of Contents MyFitnessPal platform and rent expense and associated sublease income relating to lease assets held solely for sublet purposes, primarily the lease related to our New York City, 5th Avenue location.
In addition, we strive to enhance our inventory performance by focusing on adding discipline around product purchasing, reducing production lead time and improving planning and execution for selling excess inventory through our Factory House stores and other liquidation channels. As of March 31, 2024, we had approximately $858.7 million of cash and cash equivalents.
In addition, we strive to enhance our inventory performance by focusing on adding discipline around product purchasing, reducing production lead time and improving planning and execution for selling excess inventory through our Factory House stores and other liquidation channels. As of March 31, 2025, we had approximately $501.4 million of cash and cash equivalents.
Retail presentation includes sales displays and concept shops and depreciation expense specific to our in-store fixture programs. Our marketing costs are an important driver of our growth.
Retail presentation includes sales 31 Table of Contents displays and concept shops and depreciation expense specific to our in-store fixture programs. Our marketing and advertising costs are an important driver of our growth.
As of March 31, 2024, we were in compliance with the applicable covenants.
As of March 31, 2025, we were in compliance with the applicable covenants.
In the event we determine a smaller or larger reserve is appropriate, we would record a benefit or charge to selling, general and administrative expense in the period in which such a determination was made. As of March 31, 2024 and 2023, the allowance for doubtful accounts was $15.0 million and $10.8 million, respectively.
In the event we determine a smaller or larger reserve is appropriate, we would record a benefit or charge to selling, general and administrative expenses in the period in which such a determination was made. As of March 31, 2025 and 2024, the allowance for doubtful accounts was $17.0 million and $15.0 million, respectively.
We record reductions to revenue at the time of the transaction for estimated customer returns, allowances, markdowns and discounts. We base these estimates on historical rates of customer returns and allowances as well as the specific identification of outstanding returns, markdowns and allowances that have not yet been received by us.
We record reductions to revenue at the time of the transaction for estimated customer returns, allowances, markdowns and discounts. These estimates are based on historical rates of customer returns and allowances as well as the specific identification of outstanding returns, markdowns and allowances that we have not yet received.
Minimum payments for lease obligations exclude variable lease costs, such as contingent rent expense we may incur at our Brand and Factory house stores based on future sales above a specified minimum or payments made for common area maintenance and real estate taxes.
(2) Includes future minimum payments for operating lease obligations as of March 31, 2025. Minimum payments for lease obligations exclude variable lease costs, such as contingent rent expense we may incur at our Brand and Factory house stores based on future sales above a specified minimum or payments made for common area maintenance and real estate taxes.
Our products are sold worldwide and worn by athletes at all levels, from youth to professional, on playing fields around the globe and by consumers with active lifestyles. Strategically and operationally, we remain focused on driving premium brand-right growth and improved profitability.
Our products are sold worldwide 27 Table of Contents and worn by athletes at all levels, from youth to professional, on playing fields around the globe and by consumers with active lifestyles. We remain focused on driving premium brand-right growth and delivering improved profitability.
Goodwill and indefinite lived intangible assets are not amortized and are required to be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount.
Goodwill is required to be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount.
Please refer to Part II, Item 7 of our Annual Report on Form 10-K, filed with the Securities Exchange Commission ("SEC") on May 24, 2023 for a comparative discussion of our Fiscal 2023 financial results as compared with the twelve months ended March 31, 2022, which is incorporated by reference herein.
Please refer to Part II, Item 7 of our Annual Report on Form 10-K for Fiscal 2024, filed with the Securities Exchange Commission ("SEC") on May 29, 2024, which is incorporated by reference herein, for a comparative discussion of our Fiscal 2024 financial results as compared to Fiscal 2023.
During Fiscal 2024 and Fiscal 2023, we paid $75.0 million and $125.0 million, respectively, to repurchase shares of our Class C Common Stock through accelerated share repurchase transactions. For more details, see discussion above under "Share Repurchase Program".
Additionally, we paid $90.0 million to repurchase shares of our Class C Common Stock through accelerated share repurchase transactions during Fiscal 2025. During Fiscal 2024, we paid $75.0 million to repurchase shares of our Class C Common Stock through accelerated share repurchase transactions. For more details, see discussion above under "Share Repurchase Program".
The marketing category consists primarily of sports and brand marketing, media, and retail presentation. Sports and brand marketing includes professional, club and collegiate sponsorship agreements, individual athlete and influencer agreements, and providing and selling products directly to teams and individual athletes. Media includes digital, broadcast, and print media outlets, including social and mobile media.
Sports and brand marketing includes professional, club and collegiate sponsorship agreements, individual athlete and influencer agreements, and providing and selling products directly to teams and individual athletes. Media includes digital, broadcast, and print media outlets, including social and mobile media.
It is also possible that other professionals, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts. Actual results could be significantly different from these estimates. Revenue Recognition We recognize revenue pursuant to Accounting Standards Codification 606 ("ASC 606").
It is also possible that other professionals, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts. Actual results could be significantly different from these estimates.
We fund our working capital, primarily inventory, and capital investments from cash flows from operating activities, cash and cash equivalents on hand, and borrowings available under our credit and long-term debt facilities.
LIQUIDITY AND CAPITAL RESOURCES Our cash requirements have principally been for working capital and capital expenditures. We fund our working capital, primarily inventory, and capital investments from cash flows from operating activities, cash and cash equivalents on hand, and borrowings available under our credit and long-term debt facilities.
In general, as a percentage of net revenues, we expect cost of goods sold associated with our apparel and accessories to be lower than that of our footwear. A limited portion of cost of goods sold is associated with digital subscription and advertising revenues, primarily website hosting costs, and no cost of goods sold is associated with our license revenues.
In general, as a percentage of net revenues, we expect cost of goods sold associated with our apparel and accessories to be lower than that of our footwear. No cost of goods sold is associated with our license revenues.
Deferred income tax assets are reduced by valuation allowances when necessary. Income taxes include the largest amount of tax benefit for an uncertain tax position that is more likely than not to be sustained upon audit based on the technical merits of the tax position.
Income taxes include the largest amount of tax benefit for an uncertain tax position that is more likely than not to be sustained upon audit based on the technical merits of the tax position.
Refer to our "Risk Factors" section included in Part I, Item 1A of this Annual Report on Form 10-K. 35 Table of Contents Share Repurchase Program On February 23, 2022, our Board of Directors authorized us to repurchase up to $500 million (exclusive of fees and commissions) of outstanding shares of our Class C Common Stock over the following two years.
Refer to our "Risk Factors" section included in Part I, Item 1A of this Annual Report on Form 10-K. 35 Table of Contents Share Repurchase Program On May 15, 2024, our Board of Directors authorized us to repurchase up to $500 million (exclusive of fees and commissions) of outstanding shares of our Class C Common Stock through May 31, 2027.
In addition, it is not possible to determine the performance incentive amounts we may be required to pay under these agreements as they are primarily subject to certain performance based and other variables. The amounts listed above are 36 Table of Contents the fixed minimum amounts required to be paid under these sponsorship agreements.
In addition, it is not possible to determine the performance incentive amounts we may be required to pay under these agreements as they are primarily subject to certain performance based and other variables.
Within selling, general and administrative expense: • Marketing costs decreased $51.8 million or 8.3%, due to a reduction in marketing activities during the period.
Within selling, general and administrative expenses: • Marketing and advertising costs decreased $18.7 million or 3.3%, due to a reduction in marketing activities during the period.
Outbound handling costs include costs associated with preparing goods to ship to customers and certain costs to operate our distribution facilities. These costs were $79.8 million in Fiscal 2024 (Fiscal 2023: $79.5 million). Gross profit decreased by $13.6 million to $2,630.3 million during Fiscal 2024, as compared to $2,643.8 million in Fiscal 2023.
Outbound handling costs include costs associated with preparing goods to ship to customers and certain costs to operate our distribution facilities. These costs were $78.0 million for Fiscal 2025 (Fiscal 2024: $79.8 million). Gross profit decreased by $155.5 million to $2.5 billion during Fiscal 2025, as compared to $2.6 billion during Fiscal 2024.
Corporate Other also includes expenses related to our central supporting functions. The decrease in total operating income for Fiscal 2024, compared to Fiscal 2023, was primarily driven by the following: • Operating income in our North America region decreased by $36.8 million to $677.9 million from $714.7 million.
Corporate Other also includes expenses related to our central supporting functions. The decrease in total operating income for Fiscal 2025, compared to Fiscal 2024, was primarily driven by the following: • Operating income in our North America region decreased by $48.4 million, or 7.1%.
It is not possible to determine how much we will spend on product supply obligations on an annual basis as contracts generally do not stipulate specific cash amounts to be spent on products.
Some of these sponsorship agreements provide for additional performance incentives and product supply obligations. It is not possible to determine how much we will spend on product supply obligations on an annual basis as contracts generally do not stipulate specific cash amounts to be spent on products.
As a result, $74.8 million was recorded to retained earnings to reflect the difference between the market price of the Class C Common Stock repurchased and its par value during Fiscal 2024 (Fiscal 2023: $174.0 million).
As a result, $25.9 million was recorded to retained earnings to reflect the difference between the market price of the Class C Common Stock repurchased and its par value.
In March 2024, we entered into a fourth amendment to the credit agreement (the credit agreement as amended and the "amended credit agreement" or the "revolving credit facility").
In March 2025, we entered into the sixth amendment to the credit agreement (the credit agreement as amended, the "amended credit agreement" or the "revolving credit facility").
Net realizable value is estimated based upon assumptions made about future demand and retail market conditions. If we determine that the estimated net realizable value of our inventory is less than the carrying value of such inventory, we record a charge to cost of goods sold to reflect the lower of cost or net realizable value.
If we determine that the estimated net realizable value of our inventory is less than the carrying value of such inventory, we record a charge to cost of goods sold to reflect the lower of cost or net realizable value.
Corporate Other consists primarily of (i) operating results related to our MMR platforms and other digital business opportunities; (ii) general and administrative expenses not allocated to an operating segment, including expenses associated with centrally managed departments such as global marketing, global IT, global supply chain and innovation, and other corporate support functions; (iii) restructuring and restructuring related charges, if any; and (iv) certain foreign currency hedge gains and losses.
Corporate Other consists primarily of (i) general and administrative expenses not allocated to an operating segment, including expenses associated with centrally managed departments such as global marketing, global information technology, global supply chain and innovation, and other corporate support functions; (ii) restructuring and restructuring related charges, if any; (iii) certain foreign currency hedge gains and losses; and (iv) operating results from the MapMyFitness digital platform, which was sold during the second quarter of Fiscal 2025.
These open purchase orders specify fixed or minimum quantities of products at determinable prices. The product purchase obligations also includes fabric commitments with our suppliers, which secure a portion of our material needs for future seasons. The reported amounts exclude product purchase liabilities included in accounts payable as of March 31, 2024.
The product purchase obligations also includes fabric commitments with our suppliers, which secure a portion of our material needs for future seasons. The reported amounts exclude product purchase liabilities included in accounts payable as of March 31, 2025.
If actual market conditions are less favorable than those that we projected, further adjustments may be required that would increase the cost of goods sold in the period in which such a determination was made.
If actual market conditions are less favorable than those that we projected, further adjustments may be required that would increase the cost of goods sold in the period in which such a determination was made. As March 31, 2025 and 2024, the inventory reserve was $46.6 million and $44.2 million, respectively.
Income Taxes Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities at tax rates expected to be in effect when such assets or liabilities are realized or settled.
Deferred income tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of our 40 Table of Contents assets and liabilities at tax rates expected to be in effect when such assets or liabilities are realized or settled. Deferred income tax assets are reduced by valuation allowances when necessary.
Selling, General and Administrative Expenses Our selling, general and administrative expenses consist of costs related to marketing, selling, product innovation and supply chain, and corporate services. We consolidate our selling, general and administrative expenses into two primary categories: marketing and other. The other category is the sum of our selling, product innovation and supply chain, and corporate services categories.
We consolidate our selling, general and administrative expenses into two primary categories: "marketing and advertising" and "other." The other category is the sum of our selling, product innovation and supply chain, and corporate services categories. The marketing and advertising category consists primarily of sports and brand marketing, media, and retail presentation.
For example, as further described below, we repurchased a total of $500 million of our Class C Common Stock through a series of accelerated share repurchase transactions during Fiscal 2024, Fiscal 2023 and the Transition Period, under the two-year program authorized by our Board of Directors in February 2022, and, in May 2024, our Board of Directors authorized a new share repurchase program pursuant to which we are authorized to repurchase a total of $500 million of our Class C Common Stock through May 2027.
For example, as further described below, in May 2024, our Board of Directors authorized a new share repurchase program pursuant to which we are authorized to repurchase a total of $500 million of our Class C Common Stock through May 2027.
These inflows were partially offset by the following working capital outflows: • $274.2 million from changes in accounts payable; • $77.9 million from changes in income taxes payable and receivable, net; • $22.3 million from changes in customer refund liabilities; and • $8.9 million from changes in accrued expenses and other liabilities.
These outflows were partially offset by the following working capital inflows: • $139.4 million from changes in accounts payable; • $83.9 million from changes in accounts receivable; • $75.2 million from changes in income taxes payable and receivable, net; • $42.2 million from changes in prepaid expenses and other current assets; and • $28.2 million from changes in customer refund liabilities.
Net Sales Net sales decreased by $156.6 million, or 2.7%, to $5,578.3 million during Fiscal 2024, from $5,735.0 million in Fiscal 2023. Apparel decreased primarily due to lower unit sales, partially offset by higher average selling prices and favorable channel mix. Footwear decreased primarily due to lower unit sales, partially offset by higher average selling prices and favorable channel mix.
Net Sales Net sales decreased by $509.9 million, or 9.1%, to $5.1 billion during Fiscal 2025, from $5.6 billion during Fiscal 2024. Apparel decreased primarily due to lower unit sales and unfavorable channel mix, partially offset by higher average selling prices. Footwear decreased primarily due to lower unit sales, lower average selling prices and unfavorable channel mix.
This was primarily due to a decrease in gross profit, partially offset by lower marketing-related expenses. The decline in gross profit was driven by lower net revenues as discussed above, partially offset by lower product input costs and freight costs. • Operating income in our EMEA region increased by $64.0 million to $176.2 million from $112.2 million.
The decline in gross profit was primarily driven by lower net revenues as discussed above, partially offset by lower freight costs and lower product input costs. • Operating income in our EMEA region decreased by $29.0 million, or 16.5%. This was primarily due to higher marketing and advertising costs partially offset by an increase in gross profit.
Our significant estimates in the discounted cash flows model include: our weighted average cost of capital, long-term rate of growth and profitability of the reporting unit's business, and working capital effects.
Our significant estimates in the discounted cash flows model include: our weighted average cost of capital, long-term growth rate and profitability of the reporting unit's business, and working capital effects. If the carrying amount of a reporting unit exceeds its fair value, goodwill is impaired to the extent that the carrying value exceeds the fair value of the reporting unit.
Financial highlights for Fiscal 2024 as compared to Fiscal 2023 include: • Total net revenues decreased 3.4%. • Within our channels, wholesale revenue decreased 6.5% and direct-to-consumer revenue increased 3.0%. 28 Table of Contents • Within our product categories, apparel revenue decreased 2.1%, footwear revenue decreased 4.9%, and accessories revenue decreased 0.7%. • Net revenue decreased 8.3% in North America, increased 9.0% in EMEA, increased 5.8% in Asia-Pacific, and increased 7.6% in Latin America. • Gross margin increased 130 basis points to 46.1%. • Selling, general and administrative expenses increased 0.9%.
Financial highlights for Fiscal 2025 as compared to Fiscal 2024 include: • Total net revenues decreased 9.4%. • Within our channels, wholesale revenue decreased 8.1% and direct-to-consumer revenue decreased 10.5%. • Within our product categories, apparel revenue decreased 8.9%, footwear revenue decreased 12.8%, and accessories revenue increased 1.3%. • Net revenue decreased 11.4% in North America, increased 0.4% in EMEA, decreased 13.5% in Asia-Pacific and decreased 6.1% in Latin America. • Gross margin increased 180 basis points to 47.9%. • Selling, general and administrative expenses increased 8.4%. 2025 Restructuring Plan On May 15, 2024, our Board of Directors approved a restructuring plan (the "2025 restructuring plan") designed to strengthen and support our financial and operational efficiencies.
Incremental borrowings are uncommitted and the availability thereof will depend on market conditions at the time we seek to incur such borrowings. Borrowings, if any, under the revolving credit facility have maturities of less than one year. Up to $50.0 million of the facility may be used for the issuance of letters of credit.
Incremental borrowings are uncommitted and the availability thereof will depend on market conditions at the time we seek to incur such borrowings. Up to $50.0 million of the facility may be used for the issuance of letters of credit. As of March 31, 2025, $45.7 million of letters of credit were outstanding (March 31, 2024: $4.2 million).
Year Ended March 31, (In thousands) 2024 2023 Change ($) Change (%) Selling, General and Administrative Expenses $ 2,400,502 $ 2,380,245 $ 20,257 0.9 % Selling, general and administrative expenses increased by $20.3 million, or 0.9%, during Fiscal 2024 as compared to Fiscal 2023.
Year Ended March 31, (In thousands) 2025 2024 Change ($) Change (%) Selling, General and Administrative Expenses $ 2,601,991 $ 2,400,502 $ 201,489 8.4 % Selling, general and administrative expenses increased by $201.5 million, or 8.4%, during Fiscal 2025 as compared to Fiscal 2024.
See Note 9 to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details.
Interest Income (Expense), net Interest income (expense), net is primarily comprised of interest income earned on our cash and cash equivalents, offset by interest expense incurred on our debt facilities. See Note 9 to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details.
The leases expire at various dates through 2038, excluding extensions at our option, and include provisions for rental adjustments. In addition, this table includes executed lease agreements for Brand and Factory House stores that we did not yet occupy as of March 31, 2024. The operating leases generally contain renewal provisions for varying periods of time.
In addition, this table includes executed lease agreements for Brand and Factory House stores that have not yet commenced as of March 31, 2025. The operating leases generally contain renewal provisions for varying periods of time.
This was driven by a decrease in both our wholesale channel and our direct-to-consumer channel as well as a decrease in licensing revenues. Within our direct-to-consumer channel, net revenues decreased in both e-commerce and owned and operated retail store sales. • Net revenues in our EMEA region increased by $89.3 million, or 9.0%, to $1,081.9 million from $992.6 million.
Within our direct-to-consumer channel, net revenues decreased in both e-commerce and owned and operated retail stores. • Net revenues in our EMEA region increased by $4.7 million, or 0.4%. This was driven by an increase in our direct-to-consumer channel, partially offset by a decrease in our wholesale channel.
Pursuant to a number of previously disclosed accelerated share repurchase transactions that the Company entered into between May 2022 and November 2023 (the "ASR Agreements"), we repurchased 10.7 million and 18.7 million shares of Class C Common Stock, which were immediately retired, during Fiscal 2024 and Fiscal 2023, respectively.
During Fiscal 2025, pursuant to the March 2025 ASR Agreement and the previously disclosed accelerated share repurchase transactions that we entered into in May 2024 and December 2024, we repurchased $90 million or 12.8 million shares of Class C Common Stock, which were immediately retired.
Year Ended March 31, (In thousands) 2024 2023 Change ($) Change (%) Interest (income) expense, net $ (268) $ 12,826 $ (13,094) (102.1) % Interest expense, net decreased by $13.1 million to interest income, net of $0.3 million during Fiscal 2024.
Year Ended March 31, (In thousands) 2025 2024 Change ($) Change (%) Interest income (expense), net $ (6,115) $ 268 $ (6,383) (2381.7) % Interest expense, net increased by $6.4 million to $6.1 million during Fiscal 2025 compared to interest income, net of $0.3 million during Fiscal 2024.
Cash Flows The following table presents the major components of our cash flows provided by and used in operating, investing and financing activities for the periods presented: Year Ended March 31, (In thousands) 2024 2023 Change ($) Net cash provided by (used in): Operating activities $ 353,970 $ (39,886) $ 393,856 Investing activities (105,333) (123,066) 17,733 Financing activities (78,690) (126,375) 47,685 Effect of exchange rate changes on cash and cash equivalents (19,775) (5,315) (14,460) Net increase (decrease) in cash and cash equivalents $ 150,172 $ (294,642) $ 444,814 Operating Activities Cash flows from operating activities increased by $393.9 million, as compared to Fiscal 2023, primarily driven by an increase in net income before the impact of non-cash items of $29.9 million and an increase from changes in working capital of $364.0 million.
Cash Flows The following table presents the major components of our cash flows provided by and used in operating, investing and financing activities for the periods presented: Year Ended March 31, (In thousands) 2025 2024 Change ($) Net cash provided by (used in): Operating activities $ (59,319) $ 353,970 $ (413,289) Investing activities (126,350) (105,333) (21,017) Financing activities (180,806) (78,690) (102,116) Effect of exchange rate changes on cash and cash equivalents 4,609 (19,775) 24,384 Net increase (decrease) in cash and cash equivalents $ (361,866) $ 150,172 $ (512,038) Operating Activities Cash flows from operating activities decreased by $413.3 million, as compared to Fiscal 2024, primarily driven by decrease in net income before the impact of non-cash items of $455.5 million offset by an increase from changes in working capital of $42.2 million.
Additionally, these amounts include minimum guaranteed royalty payments to endorsers and licensors based upon a predetermined percent of sales of particular products. The table above excludes a liability of $63.5 million for uncertain tax positions, inclusive of related interest and penalties, as we are unable to reasonably estimate the timing an amount of future cash settlement.
The table above excludes a liability of $79.4 million for uncertain tax positions, inclusive of related interest and penalties, as we are unable to reasonably estimate the timing and amount of future cash settlement.
This was primarily due to an increase in gross profit, lower marketing-related expenses and lower selling and distribution expenses, partially offset by higher facilities-related expenses and bad debt expenses.
This was primarily due to a decrease in gross profit, partially offset by lower marketing and advertising costs, selling and distribution expenses and salaried compensation expenses.
(3) We generally place orders with our manufacturers at least three to four months in advance of expected future sales. The amounts listed for product purchase obligations primarily represent our open production purchase orders with our manufacturers for our apparel, footwear and accessories, including expected inbound freight, duties and other costs.
The amounts listed for product purchase obligations primarily represent our open production purchase orders with our manufacturers for our apparel, footwear and accessories, including expected inbound freight, duties and other costs. These open purchase orders specify fixed or minimum quantities of products at determinable prices.
As of March 31, 2024 and 2023, there were $139.3 million and $160.5 million, respectively, in reserves for returns, allowances, markdowns and discounts within customer refund liability and $29.5 million and $40.7 million, respectively, as the estimated value of inventory associated with the reserves for sales returns within prepaid expenses and other current assets on the Consolidated Balance Sheets.
The value of inventory associated with reserves for sales returns included within prepaid expenses and other current assets on the Consolidated Balance Sheets as of March 31, 2025 was $33.6 million (March 31, 2024: $29.5 million).
The actual amount of customer returns and allowances, which are inherently uncertain, may differ from our estimates. If we determine that actual or expected returns or allowances are significantly higher or lower than the reserves we established, we would record a reduction or increase, as appropriate, to net sales in the period in which we make such a determination.
If we determine that actual or expected returns or allowances are significantly higher or lower than the reserves we established, we would record a reduction or increase, as appropriate, to net sales in the period in which such a determination was 39 Table of Contents made. Provisions for customer specific discounts are based on contractual obligations with certain major customers.
Net revenues in our Asia-Pacific region were also negatively impacted by changes in foreign exchange rates. • Net revenues in our Latin America region increased by $16.3 million, or 7.6%, to $229.5 million from $213.2 million. This was primarily driven by an increase in both our direct-to-consumer channel and our wholesale channel.
Within our direct-to-consumer channel, net revenues decreased in both e-commerce and owned and operated retail stores. Net revenues in our Asia-Pacific region were also negatively impacted by changes in foreign exchange rates. • Net revenues in our Latin America region decreased by $14.1 million, or 6.1%. This was primarily driven by negative impacts of changes in foreign exchange rates.
In connection with the restructuring plan, we expect to incur total estimated pre-tax restructuring and related charges of approximately $70 million to $90 million during fiscal year 2025, primarily consisting of up to approximately: • $50 million in cash-related charges, consisting of approximately $15 million in employee severance and benefits costs, and $35 million related to various transformational initiatives; and • $40 million in non-cash charges consisting of approximately $7 million in employee severance and benefits costs and $33 million in facility, software and other asset-related charges and impairments.
We currently expect the charges to be incurred under the 2025 restructuring plan to include (i) up to $90 million in cash-related charges, consisting of approximately $23 million in employee severance and benefits costs and $67 million related to various transformational initiatives; and (ii) up to $70 million in non-cash charges, including approximately $7 million in employee severance and benefits costs and $63 million in facility, software, and other asset-related charges and impairments.
Year Ended March 31, (In thousands) 2024 2023 Change ($) Change (%) Other income (expense), net $ 32,055 $ 17,096 $ 14,959 87.5 % Other income, net increased by $15.0 million to $32.1 million during Fiscal 2024.
Year Ended March 31, (In thousands) 2025 2024 Change ($) Change (%) Other income (expense), net $ (13,431) $ 32,055 $ (45,486) (141.9) % Other expense, net increased by $45.5 million to $13.4 million during Fiscal 2025 compared to other income, net of $32.1 million during Fiscal 2024.
Income Tax Expense (Benefit) Year Ended March 31, (In thousands) 2024 2023 Change ($) Change (%) Income tax expense (benefit) $ 30,006 $ (108,645) $ 138,651 (127.6) % Income tax expense increased $138.7 million to $30.0 million during Fiscal 2024 from an income tax benefit of $108.6 million in Fiscal 2023.
Income Tax Expense (Benefit) Year Ended March 31, (In thousands) 2025 2024 Change ($) Change (%) Income tax expense (benefit) $ (2,890) $ 30,006 $ (32,896) (109.6) % Income tax expense decreased $32.9 million to a tax benefit of $2.9 million during Fiscal 2025 from income tax expense of $30.0 million during Fiscal 2024.
The increase in gross profit was driven by higher net revenues as discussed above. • Operating income in our Latin America region increased by $14.9 million to $38.4 million from $23.5 million. This was primarily due to an increase in gross profit, partially offset by higher selling and distribution costs.
The increase in gross profit was driven by higher net revenues as discussed above and lower product input costs. • Operating income in our Asia-Pacific region decreased by $46.5 million, or 38.8%. This was primarily due to a decrease in gross profit, partially offset by lower marketing and advertising costs.
This was primarily driven by an increase in both our direct-to-consumer channel and our wholesale channel. Within our direct-to-consumer channel, net revenues increased in both owned and operated retail store and e-commerce sales.
Within our direct-to-consumer channel, net revenues increased in both owned and operated retail stores and e-commerce. • Net revenues in our Asia-Pacific region decreased by $117.6 million, or 13.5%. This was driven by a decrease in both our wholesale and direct-to-consumer channels, partially offset by an increase in license revenues.
Net Revenues Year Ended March 31, (In thousands) 2024 2023 Change ($) Change (%) North America $ 3,505,167 $ 3,820,522 $ (315,355) (8.3) % EMEA 1,081,915 992,624 89,291 9.0 % Asia-Pacific 873,019 825,338 47,681 5.8 % Latin America 229,481 213,215 16,266 7.6 % Corporate Other (1) 12,297 51,466 (39,169) (76.1) % Total net revenues $ 5,701,879 $ 5,903,165 $ (201,286) (3.4) % (1) Corporate Other primarily includes foreign currency hedge gains and losses related to revenues generated by entities within our operating segments but managed through our central foreign exchange risk management program, as well as subscription revenues from MMR and revenue from other digital business opportunities.
Net Revenues Year Ended March 31, (In thousands) 2025 2024 Change ($) Change (%) North America $ 3,105,624 $ 3,505,167 $ (399,543) (11.4) % EMEA 1,086,578 1,081,915 4,663 0.4 % Asia-Pacific 755,437 873,019 (117,582) (13.5) % Latin America 215,427 229,481 (14,054) (6.1) % Corporate Other (1) 1,244 12,297 (11,053) (89.9) % Total net revenues $ 5,164,310 $ 5,701,879 $ (537,569) (9.4) % (1) Corporate Other primarily includes foreign currency hedge gains and losses related to revenues generated by entities within our operating segments but managed through our central foreign exchange risk management program.
We expect a portion of our capital expenditures over the next few years to include investments incorporating sustainable and intelligent building design features into this facility. 37 Table of Contents Financing Activities Cash flows used in financing activities decreased by $47.7 million, as compared to Fiscal 2023.
A portion of our capital expenditures included investments incorporating sustainable and intelligent building design features into this facility. 37 Table of Contents Financing Activities Cash flows used in financing activities increased by $102.1 million, as compared to Fiscal 2024. During Fiscal 2025, we repaid the $80.9 million aggregate principal amount of the Convertible Senior Notes outstanding using cash on hand.
In addition, we may seek alternative sources of liquidity, including but not limited to, accessing the capital markets, sale-leaseback transactions or other sales of assets, or other alternative financing measures. However, instability in, or tightening of the capital markets, could adversely affect our ability to access the capital markets on terms acceptable to us or at all.
However, instability in, or tightening of the capital markets, could adversely affect our ability to access the capital markets on terms acceptable to us or at all.
As of March 31, 2024, the commitment fee was 15.0 basis points. 38 Table of Contents 1.50% Convertible Senior Notes We have approximately $80.9 million aggregate principal amount of 1.50% convertible senior notes due 2024 (the "Convertible Senior Notes") outstanding as of March 31, 2024, which were issued in May 2020.
As of March 31, 2025, the commitment fee was 17.5 basis points. 1.50% Convertible Senior Notes On June 1, 2024, our previously outstanding $80.9 million aggregate principal amount of 1.50% convertible senior notes due 2024 (the "Convertible Senior Notes") matured.
Accessories decreased primarily due to lower average selling prices and lower unit sales, partially offset by favorable channel and regional mix. From a channel perspective, the decrease in net sales was due to a decrease in wholesale, partially offset by an increase in direct-to-consumer.
Accessories increased primarily due to higher unit sales and higher average selling prices, partially offset by unfavorable channel mix. From a channel perspective, the decrease in net sales was due to a decrease in both wholesale and direct-to-consumer. License Revenues License revenues decreased by $16.7 million or 15.0%, to $94.6 million during Fiscal 2025, from $111.2 million during Fiscal 2024.
The changes in working capital were due to the following inflows: • $585.5 million from changes in inventories; • $95.9 million from changes in other non-current assets; • $57.0 million from changes in accounts receivable; and • $8.8 million from changes in prepaid expenses and other current assets.
The changes in working capital were due to the following outflows: • $205.5 million from changes in inventories; • $76.7 million from changes in other non-current assets; and • $44.4 million from changes in accrued expenses and other liabilities.
This was primarily due to a higher earn-out recorded in connection with the sale of the MyFitnessPal platform of $5.0 million, a net gain from on 32 Table of Contents foreign currency hedges of $6.2 million and a net gain from changes in foreign currency exchange rates of $2.1 million.
This was primarily due to an earn-out recorded during Fiscal 2024 in connection with the sale of MyFitnessPal platform, partially offset by a net gain from foreign currency hedges.
The following tables summarize net revenues by product category and distribution channel for the periods indicated: 30 Table of Contents Year Ended March 31, (In thousands) 2024 2023 Change ($) Change (%) Net Revenues by Product Category Apparel $ 3,789,016 $ 3,871,167 $ (82,151) (2.1) % Footwear 1,383,610 1,455,265 (71,655) (4.9) % Accessories 405,715 408,521 (2,806) (0.7) % Net Sales 5,578,341 5,734,953 (156,612) (2.7) % License revenues 111,241 116,746 (5,505) (4.7) % Corporate Other (1) 12,297 51,466 (39,169) (76.1) % Total net revenues $ 5,701,879 $ 5,903,165 $ (201,286) (3.4) % Net Revenues by Distribution Channel Wholesale $ 3,243,187 $ 3,468,126 $ (224,939) (6.5) % Direct-to-consumer 2,335,154 2,266,827 68,327 3.0 % Net Sales 5,578,341 5,734,953 (156,612) (2.7) % License revenues 111,241 116,746 (5,505) (4.7) % Corporate Other (1) 12,297 51,466 (39,169) (76.1) % Total net revenues $ 5,701,879 $ 5,903,165 $ (201,286) (3.4) % (1) Corporate Other primarily includes foreign currency hedge gains and losses related to revenues generated by entities within our operating segments but managed through our central foreign exchange risk management program, as well as subscription revenues from MMR and revenue from other digital business opportunities.
The following tables summarize net revenues by product category and distribution channel for the periods indicated: Year Ended March 31, (In thousands) 2025 2024 Change ($) Change (%) Net Revenues by Product Category Apparel $ 3,451,414 $ 3,789,016 $ (337,602) (8.9) % Footwear 1,206,202 1,383,610 (177,408) (12.8) % Accessories 410,860 405,715 5,145 1.3 % Net Sales 5,068,476 5,578,341 (509,865) (9.1) % License revenues 94,590 111,241 (16,651) (15.0) % Corporate Other (1) 1,244 12,297 (11,053) (89.9) % Total net revenues $ 5,164,310 $ 5,701,879 $ (537,569) (9.4) % (1) Corporate Other primarily includes foreign currency hedge gains and losses related to revenues generated by entities within our operating segments but managed through our central foreign exchange risk management program. 30 Table of Contents Year Ended March 31, (In thousands) 2025 2024 Change ($) Change (%) Net Revenues by Distribution Channel Wholesale $ 2,978,869 $ 3,243,187 $ (264,318) (8.1) % Direct-to-consumer 2,089,607 2,335,154 (245,547) (10.5) % Net Sales 5,068,476 5,578,341 (509,865) (9.1) % License revenues 94,590 111,241 (16,651) (15.0) % Corporate Other (1) 1,244 12,297 (11,053) (89.9) % Total net revenues $ 5,164,310 $ 5,701,879 $ (537,569) (9.4) % (1) Corporate Other primarily includes foreign currency hedge gains and losses related to revenues generated by entities within our operating segments but managed through our central foreign exchange risk management program.
Gross profit as a percentage of net revenues, or gross margin, increased to 46.1% from 44.8%. This increase in gross margin of 130 basis points was primarily driven by favorable impacts of approximately 290 basis points from supply chain benefits, mainly due to lower freight and product costs.
This increase in gross margin of approximately 180 basis points was primarily driven by favorable impacts of 130 basis points from supply chain benefits related to lower freight and product costs and approximately 80 basis points of pricing benefits largely due to lower levels of discounting and promotions within our direct-to-consumer channel.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe table below provides information about our foreign currency forward exchange agreements for the currencies listed above and presents the notional amounts and weighted average exchange rates by contractual maturity dates: Fiscal year ending March 31, Fair Value as of (In thousands) 2025 2026 2027 2028 2029 and thereafter Total March 31, 2024 March 31, 2023 On-Balance Sheet Financial Instruments USD Functional Currency EUR Notional $ 152,245 $ 57,791 $ — $ — $ — $ 210,036 $ 668 $ (3,263) Weighted Average Exchange Rate 1.09 1.12 1.10 GBP Notional 280,717 114,995 — — — 395,712 (3,721) 6,024 Weighted Average Exchange Rate 1.24 1.28 1.25 JPY Notional 22,808 5,711 — — — 28,519 2,705 897 Weighted Average Exchange Rate 0.01 0.01 0.01 CNY Functional Currency USD Notional 203,049 84,249 — — — 287,298 3,158 2,461 Weighted Average Exchange Rate 7.00 6.96 6.99 CAD Functional Currency USD Notional 79,063 32,208 — — — 111,271 1,299 3,538 Weighted Average Exchange Rate 1.34 1.34 1.34 MXN Functional Currency USD Notional 74,227 28,966 — — — 103,193 (10,452) (15,271) Weighted Average Exchange Rate 19.35 18.53 19.12 KRW Functional Currency USD Notional 45,838 17,200 — — — 63,038 1,740 646 Weighted Average Exchange Rate 1,281.40 1,296.24 1,285.45 We currently generate a majority of our consolidated net revenues in the United States, and the reporting currency for our Consolidated Financial Statements is the U.S. dollar.
Biggest changeThe table below provides information about our foreign currency forward exchange agreements for the currencies listed above and presents the notional amounts and weighted average exchange rates by contractual maturity dates: 41 Table of Contents Fiscal year ending March 31, Fair Value as of (In thousands) 2026 2027 2028 2029 2030 and thereafter Total March 31, 2025 March 31, 2024 On-Balance Sheet Financial Instruments USD Functional Currency EUR Notional $ 201,615 $ 112,327 $ — $ — $ — $ 313,942 $ (3,384) $ 668 Weighted Average Exchange Rate 1.09 1.08 1.09 GBP Notional 281,402 115,102 — — — 396,504 (3,800) (3,721) Weighted Average Exchange Rate 1.28 1.26 1.27 JPY Notional 25,191 12,413 — — — 37,604 777 2,705 Weighted Average Exchange Rate 0.01 0.01 0.01 CNY Functional Currency USD Notional 84,249 — — — — 84,249 2,295 3,158 Weighted Average Exchange Rate 6.96 6.96 CAD Functional Currency USD Notional 86,105 68,978 — — — 155,083 3,307 1,299 Weighted Average Exchange Rate 1.36 1.39 1.37 MXN Functional Currency USD Notional 74,244 34,803 — — — 109,047 1,297 (10,452) Weighted Average Exchange Rate 19.58 21.75 20.27 KRW Functional Currency USD Notional 17,200 — — — — 17,200 1,212 1,740 Weighted Average Exchange Rate 1,296.24 1,296.24 We currently generate a majority of our consolidated net revenues in the United States, and the reporting currency for our Consolidated Financial Statements is the U.S. dollar.
When anticipated transaction estimates or actual transaction amounts decline below hedged levels, or if it is no longer probable a forecasted transaction will occur by the end of the originally specified time period or within an additional two-month period of time, we are required to reclassify the cumulative change in fair value of the over-hedged portion of the related hedge contract from Other comprehensive income (loss) to Other expense, net during the period in which the decrease occurs.
When anticipated transaction estimates or actual transaction amounts decline below hedged levels, or if it is no longer probable a forecasted transaction will occur by the end of the originally specified time period or within an additional two-month period of time, we are required to reclassify the cumulative change in fair value of the over-hedged portion of the related hedge contract from Other comprehensive income (loss) to Other income (expense), net during the period in which the decrease occurs.
One of the criteria for this accounting treatment is the notional value of these 42 Table of Contents derivative contracts should not be in excess of specifically identified anticipated transactions. By their very nature, our estimates of the anticipated transactions may fluctuate over time and may ultimately vary from actual transactions.
One of the criteria for this accounting treatment is the notional value of these derivative contracts should not be in excess of specifically identified anticipated transactions. By their very nature, our estimates of the anticipated transactions may fluctuate over time and may ultimately vary from actual transactions.
We use derivative instruments to manage financial exposures that occur in the normal course of business and do not hold or issue derivatives for trading or speculative purposes. 41 Table of Contents We may elect to designate certain derivatives as hedging instruments under U.S. GAAP.
We use derivative instruments to manage financial exposures that occur in the normal course of business and do not hold or issue derivatives for trading or speculative purposes. We may elect to designate certain derivatives as hedging instruments under U.S. GAAP.
Although we have entered into foreign currency contracts to minimize some of the impact of foreign currency exchange rate fluctuations on future cash flows, we cannot be assured that foreign currency exchange rate fluctuations will not have a material adverse impact on our financial condition and results of operations.
Although we have entered into foreign currency contracts to minimize some of the impact of foreign currency exchange rate fluctuations on future 42 Table of Contents cash flows, we cannot be assured that foreign currency exchange rate fluctuations will not have a material adverse impact on our financial condition and results of operations.
As of March 31, 2024, the aggregate notional value of our outstanding cash flow hedges wa s $1,199.1 million, w i th contract maturities ranging from one to twenty-four months.
As of March 31, 2025, the aggregate notional value of our outstanding cash flow hedges wa s $1.1 billion, w i th contract maturities ranging from one to twenty-four months.
Our foreign exchange risk management program consists of designated cash flow hedges and undesignated hedges. As of March 31, 2024, we had hedge instruments, primarily for British Pound/U.S. Dollar, U.S. Dollar/Chinese Renminbi, Euro/U.S. Dollar, U.S. Dollar/South Korean Won, U.S. Dollar/Mexican Peso, and U.S. Dollar/Canadian Dollar currency pairs.
Our foreign exchange risk management program consists of designated cash flow hedges and undesignated hedges. As of March 31, 2025, we have hedge instruments, primarily for British Pound/U.S. Dollar, Euro/U.S. Dollar, U.S. Dollar/Chinese Renminbi, U.S. Dollar/Canadian Dollar, U.S. Dollar/Mexican Peso, U.S. Dollar/Korean Won, and U.S. Dollar/Japanese Yen currency pairs.
We believe that our allowance for doubtful accounts is sufficient to cover customer credit risks as of March 31, 2024. Refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates - Allowance for Doubtful Accounts" for a further discussion on our policies.
We believe that our allowance for doubtful accounts is sufficient to cover customer credit risks as of March 31, 2025. Refer to Note 2 to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for a further discussion of our accounting policies.

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