Under Armour is set to slash three per cent of its workforce resulting in 400 job losses as it drives forward a restructuring plan.
The sportswear retailer announced yesterday that it would make further job cuts to keep costs down, having let go a further 277 staff last August.
Despite this leading to a further $10 million (£7.5 million) in severance charges, bringing the total pre-tax restructuring charges for the year up from its previous guidance to between $200 million and $220 million, Under Armour’s shares have rallied seven per cent.
Investors have hailed its efforts to trim its operation costs, sending share prices jumping to $20 following a difficult month.
Not including one-off restructuring costs, full year adjusted diluted earnings expectations were lifted from between $0.14 and $0.19 to between $0.16 and $0.19, suggesting its cut throat strategy is paying off.
“In our relentless pursuit of running a more operationally excellent company, we continue to make difficult decisions to ensure we are best positioned to succeed,” chief financial officer David Bergman said.
Analysts at Jefferies stated they believed the “benefits of a leaner organisation extend well-beyond immediate cost savings,” adding that an optimised workforce would enable faster decision making supporting strategic initiatives.