Patrik Frisk
President & Chief Executive Officer at Under Armour
Thanks, Lance and good morning to everyone. On today's call, we'll review results from our transition quarter that ended March 31st, 2022 and provide our initial outlook for fiscal 2023.
Having successfully executed a multiyear transformation after delivering the best year in Under Armour's history in 2021, results for our transition period came in lighter than we had expected due to ongoing supply challenges and emerging COVID-19 impact on our Asia-Pacific business. These trends, which we believe to be temporary, are also expected to impact how fiscal 2023 is shaping up.
Dave will discuss these elements later in our call. Yet despite these near-term headwinds, I'd underscore the confidence we have in our long-term growth potential. Over the past few years following the completion of a multiyear transformation, including work to recenter our strategy, operations, and financial discipline, we've strengthened our brand, delivered higher quality revenue, and are managing our business for improved profitability, including improved margins cash flow and return on capital. The engine that makes this model work most efficiently is profitable topline growth. This is my number one priority as CEO. We believe our direct-to-consumer, footwear women's, and international businesses will drive this growth over the long-term. Across these drivers, our growth strategy is anchored in five platforms, engineered to accelerate our ability to scale and grow the Under Armour brand.
First is consumer-centricity, which lies at the core of our reason for being. To activate our purpose of empowering those who strive for more, we are committed to having a deep understanding of our athletes, their functional and emotional needs, and their behaviors and preferences as they complete their journey from discovery to purchase to advocacy. By incorporating insights data and analytics, we work to ensure we evolve as consumers evolve creating repeatable connection points.
Our second platform, product engine is the creation of industry-leading innovations. These inventions wrapped norm, enable athletes to train, compete, and recover at the highest level possible. Leveraging consumer insight ensures our product is optimized for performance, style, and cultural relevance. Through our train compete and recover architecture, our constant focus is on delivering tangible performance advantages to drive loyalty, always ensuring we deliver products that athletes didn't know they needed and now can't imagine living without.
Third is our go-to-market platform, which is how we manage the marketplace, balancing product creation, storytelling and experiences, with strong commercial relationships among our wholesale partners. We made considerable progress here by optimizing our work process calendar, delivering increasingly better segmentation and ultimately ensuring that wherever and whenever we show up, consumers are engaging with us the brand-right premium way.
Fourth is end-to-end planning, which is another Under Armour innovating product platform. As we work to solve complexity among our product creation and life cycle management, sustainability logistics and financial forecasting, we're collaborating on ways to bring supply chain discipline company functions, suppliers and customers in sync to create the most optimal ecosystem possible. Having completed work on many of the individual components of this effort, we are now focused on connecting them to get even sharper and more efficient as we grow.
Finally, is omnichannel excellence, which targets delivering a seamless premium experience across all brand touch points. By establishing a voice-of-the-consumer capability, we're utilizing a channel-agnostic approach to map an athlete's purchase journey, identifying and reducing friction points along the way. Furthermore, harnessing the power of our eCommerce platform to improve performance and speed along with endless aisle buy online and pick up in store and flex payment capabilities are driving a more enjoyable digital experience. Adding even more horsepower to this effort and taking lessons learned from a successful program implemented in China over the past year, we plan to launch a loyalty test pilot in North America by the end of 2022. This program will engage consumers more deeply with all facets of our human performance system, via content, events, rewards and community-based interactions all to make the focused performer better.
Additionally, we continue to evolve our brand house and factory health store concepts, strengthening our ability to deliver an efficient and well-balanced multichannel experience. When combined, these platforms activate a powerful ecosystem of how we show up to empower and deliver performance for Under Armour athletes. At the short point of connectivity and inspiration, we lead with Team Sports and our incredible roster of sports assets. And so far in 2022, we've seen incredible examples of Under Armour making this happen.
Starting in basketball, we were thrilled to see 29 Under Armour NCAA teams qualify for this year's men's and women's March Madness tournament. And they left it all on the court, playing with the hunger grit and swagger that our athletes are known for. By starting and ending the season in first place and playing in our women-specific Flow Breakthru two shoes, the South Carolina women's basketball team brought their second national championship home to Colombia. Built and designed for women, the Breakthru two is optimized anatomically for the best fit support and grip on the court. Looking to this fall, we're excited to add number three to this highly coveted franchise.
In the NBA, Stephen Curry hit a record 16 three-pointers on his way to 50 points to win MVP in his eighth consecutive All-Star game appearance in February, wearing his signature Curry nine basketball shoe. Steph's impact off the court is equally impressive and Under Armour is proud to stand with him having donated to the Cleveland Metro School District to support their basketball programming.
In the other conference, Joel Embiid is having his best year ever, becoming the first international player in history to win the NBA scoring title and is in the running for overall MVP for the current season. We are also honored that our partner Dow and Under Armour won gold at the 2022 Edison Awards in the performance-based design category. The rubberless unit sold technology used in our UA Flow lightweight basketball and running shoes, was designed to bring energy return shock absorption and traction to enhance field cushion and speed without sacrificing durability. We are proud of the work we've done together with Dow to bring this innovative technology to market, that serves our purpose of making athletes better, while improving manufacturing efficiency and reducing material usage.
From a global football perspective, we recently announced our partnership with Aston Villa centerback and Captain Tyrone Mings. In addition to our training product and his boot of choice, the UA Clone Magnetico, Mings cited our values as the significant factors in signing with us, which is well aligned with his plan for community givebacks and empowering the access to support. This is an outstanding example of how Under Armour being purpose-led, is attracting the talent we believe exemplifies the balance necessary to build an eternal brand.
Next up, Major League Baseball is well underway and we're excited to watch our athletes build on their momentum from last season. From Bryce Harper's 2021 national MVP and his Signature UA Harper 6 cleat that delivers speed, traction and power to Freddie Freeman building off last year's World Series performance, there is another fantastic season of baseball ahead of us. And we'd be remiss not to call out Jordan Spieth for taking home his 13th PGA Tour victory with his RBC Heritage Triumph in Hilton Head, pulling out a win following a sudden death playoff. Building on the excitement of this win we're also incredibly proud to share that our 10-year partnership with Jordan has been extended by another four years through 2029. These are just a few examples of how we drive brand affinity, utilizing the best athletes on the planet, a halo that manifests itself through our run, train and recover products. And in the second half of 2022, we have several exciting innovations coming.
In our run business, we are driving loyalty through our innovation franchises, a strategy that hits two of our long-term growth drivers, footwear and women's. Translating success from our basketball business, we are excited to launch our first-ever women-specific running footwear with the UA Flow Synchronicity expected this fall.
With the midsole optimized for ground feel and geometry engineered around her anatomical differences, we see this as a game changer in how Under Armour makes her better. Also launching this fall, are reimagined versions of two of our most popular HOVR franchises, the UA HOVR Phantom 3 delivers improved stepping comfort with newly developed knit advancements and for the very first time a 100% full HOVR platform for even more advanced cushion. The UA HOVR Infinite 4, a long-distance running shoe features less rubber under foot for a more flexible sensation, balanced by a firmer carrier for a more efficient footprint, as the miles fly by.
We are equally excited about upcoming apparel launches as well. A few highlights on our train business, include expanding our high-performance UA Rush technology this fall. Rush is designed with mineral line fabrics to return infrared energy to your body, helping you work harder and recover. Combined with our seamless and smartphone technologies, we're redefining fit, form and function across performance tops, bottoms and bras. And finally, when athletes recover consistently, they're able to push themselves to become better, enabling higher performance levels than ever thought possible.
In this respect, it's time we reinvented a classic and we're doing just that. This fall, we are launching our next evolution of fleece across all collections. This new incredibly warm and lightweight material will be featured in one of Under Armour's most popular franchises, Armour fleece, with an improved athletic fit, premium finishing details, has the right amount of stretch. Additionally, this fall's fleece use over 80% sustainable recycled fibers on our way to targeting 100% recycled materials in 2023. Another highlight, and in line with our core value of acting sustainably, are our investments in amplifying our sustainability efforts, including building a new global headquarter here in Baltimore. This new brand center will help fuel our next chapter of growth and our goal of using 80% renewable energy by 2025 and a 30% reduction in greenhouse gas emissions by 2030.
Within sustainability, we are focused on three main areas. First, from a materials perspective, we are working to redefine yarns to include fabrics that have improved stretch, drive faster, perform better and most importantly are 100% recyclable. Second, from a chemistry standpoint, we are leveraging solutions and high-efficiency dyeing processes that yield improved colors while reducing water usage and improving wastewater quality. And finally, from a process viewpoint as we continue to utilize even more recycled material in our own manufacturing methods, we are working hard to establish a circularity model to ensure we're leaving our home field cleaner and less depleted than before. More will come on this when we release our 2022 Sustainability Report, which is expected this fall.
Turning to our longer-term view. I'd like to emphasize, my confidence in the balance we've struck among our strategic operational and financial principles to fuel sustainable profitable growth. And while we -- work done to grow the brand over the past few years has come to fruition, growth for the company, at least in fiscal 2023, will be tempered compared to how we see the trajectory developing in the years that follow.
I'll close by underscoring that Under Armour is a growth company with an incredible opportunity ahead of us. Our fundamentals are strong. Our underlying brand strength is improving and our confidence remains unchanged. That said, it's essential to look past near-term pressures and focus on the long-standing influxes. The price of freight, supply chain challenges and COVID-19, are not as powerful as the global passion for sport. I'm confident that we are well positioned to deliver on our promise of growth as we work through 2023 and beyond.
And now, I'll turn it over to Dave.
