Under Armour's Strategy in 2019: Its Struggle to Revive North American Sales and Profitability It is August 3, 2022, and the Board of Directors of Under Armour Incorporated has employed you as a consultant to review the company's overall situation in the wake of flat revenues and underwhelming earnings from the company's 1st Quarter fiscal 2023 earnings report. (The first quarter of Under Armour's first quarter of fiscal 2023 ended on June 30th, 2022). There were a number of details that were of concern to the Board of Directors during management's quarterly report. Revenues in North America, the company's core market, were flat. Revenues in China were down 8% due to COVID related shutdowns and supply chain disruptions. On the expenses side, Sales, General & Administrative (SGA) expenses were up 9% in the quarter to $596 million. Going forward, management was predicting a meaningful build in Under Armour inventories worldwide in the second half of fiscal 2023 as well as a sharp drop in the company's gross margins. These issues had severely compromised the company's stock price. A chart of Under Armour's recent stock price history can be found here. As a result. the board has requested that you recommend a set of specific and measurable actions for the company to take to (a) address and correct the company's forecasted inventory increase in the second half of fiscal 2023 (second half of calendar year 2022), (b) stabilize and, if possible, improve the company's gross margins to the company's historical norms, and (c) address the company's stock price, which has dropped sharply in calendar year 2022. Please report to Under Armour's board of directors that proposes a list of action recommendations that the company needs to follow into order to address all three of these areas in fiscal 2023 and beyond. Speaking in August 2022, Under Armour Chief Financial Officer David Bergman had the following to say regarding the current condition of his company: Our first quarter revenue was $1.3 billion, which was flat against last year's results. But with that said, we also expect higher levels of uncertainty to remain due to inflationary pressures. Given expectations for higher discounting and promotional activities versus our previous plan, the most significant change to our overall outlook is with our gross margins, where we now anticipate a decline.

The Under Armour Board is concerned regarding this report from management and has tasked you with taking corrective action. The Under Armour Board of Directors requests a specific and measurable recommendation in each of the three following areas:

(1) A recommendation to correct the company's anticipated build in inventories in the second half of fiscal 2023 (calendar year 2022),

(2) A recommendation to reverse and improve the company's dropping Gross Margins, and

(3) A recommendation to restore Under Armour's stock price to sustainable growth.