Under Armour, Inc. (NYSE:UA) Q3 2018 Earnings Conference Call Transcript

Oct 30, 2018 • 08:30 am ET


Under Armour, Inc. (NYSE:UA) Q3 2018 Earnings Conference Call Transcript


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Good day, ladies and gentlemen and welcome to the Under Armour Inc. third Quarter 2018 earnings webcast and conference call. (Operator Instructions) As a reminder, today's conference is being recorded.

I'd now like to introduce your host for today's conference, Mr. Lance Allega, Vice President of Investor Relations. Sir, you may begin.

Lance Allega

And good morning to everyone joining us on today's call to Under Armour's third quarter 2018 results.

(Forward-Looking Cautionary Statements)

During our call, we may reference certain non-GAAP financial information including adjusted and currency-neutral terms, which are defined in this morning's release. We use non-GAAP amounts as the lead in some of our discussions because we feel they more accurately represent the true operational performance and underlying results of our business.

You may also hear us refer to amounts in accordance with US GAAP. Reconciliations of GAAP to non-GAAP measures can be found in the supplemental financial tables included in the press release, which identify and quantify all excluded items and provide management's view on why this information is useful to investors.

Joining us on today's call will be Under Armour Chairman and CEO, Kevin Plank; President and COO, Patrik Frisk; and Chief Financial Officer, Dave Bergman. Following our prepared remarks, we'll open the call for questions.

And with that, I'll turn it over to Kevin.

Kevin Plank

On our call a year ago, I spoke about our story in the context of chapters, the early days going public and then getting big fast. In our get big faster, we accomplished what we set out to do: gain the scale and innovation, product and global footprint necessary to show up in the consumer consideration set of the world's best athletic brands.

Following this rapid growth, over the past two years of our transformation, we've been laser-focused on driving greater structural, financial and operational efficiencies. Two years that have served as one of the most challenging yet productive and opportunistic times in our history.

During this tenure, we've executed against a number of strategic initiatives to better ourselves as a company and as a brand. To highlight some of these efforts, I'd start with our restructuring plans, which we used to close underperforming facilities and retail locations, exit certain sports marketing contracts, optimize our global workforce and aggressively clear challenged inventories.

In our supply chain, we shortened lead times, are executing against a global vendor consolidation, substantially reduced our inventory levels and are continuing to increase our distribution efficiencies. Within our product, category and merchandising teams, we've aligned calendars across all functions, removed a significant number of SKUs, styles, trims, lasts and materials, shortened our overall go-to-market calendar by 4 to 5 months and streamlined our category structure.

Within marketing, digital and IT, we're improving our global CRM; utilizing ROMI, or return on marketing investment, to employ assets at the highest rates of return; updating our global ERP with our partners at SAP; and continuing to commercialize the intersection of our digital, fitness, e-commerce and social media platforms. And within our financial