Good day, and welcome to Under Armour, Inc. Annual Meeting of Stockholders. I would now like to turn the conference over to Kevin Plank, Executive Chairman and Brand Chief. Please go ahead.
Listen. You're more than your successes. You're more than your failures. You're the work. It's dirty work.
It's work that hurts. It's work that defines you. It's that fire that burns inside you.
Hello, everyone, and thank you for joining us this morning for Under Armour's 2020 Annual Shareholders Meeting. I'm Kevin Plank, the Founder, Executive Chairman and Brand Chief of this incredible company. Joining me in today's virtual meeting are Patrick Frisk, President and Chief Executive Officer Dave Bergman, our Chief Financial Officer John Stanton, our General Counsel and Corporate Secretary and Under Armour's Board of Directors. George Bodenheimer, Doug Caltharp, Jerry Davard, Doctor. Mohammad El Arin, our new Lead Director, Karen Katz, Admiral Eric Olson and Harvey Sanders.
Before we get started, I'd like to take a moment to thank a great friend to this brand, A. B. Buzzy Krohngaard, for his leadership, strategic counsel and significant contributions during his many years of service to the brand. Throughout his 15 year tenure with Under Armour, Buzzy has been a North Star of integrity and served with distinction in helping us become a global athletic brand. Words cannot express how appreciative we are for your support, strength and leadership.
Thank you, Buzzy, for your impactful and successful tenure with this brand. Telephone meeting falls way short of how we would prefer to honor you, but I do have a personal package of Under Armour's latest and greatest coming to your house. Thank you, Buzzy. With that, let's dive right in. The agenda for today includes the formal business of the meeting as well as an overview of our business today and how we plan to march forward from myself, Patrick and Dave.
Following that business overview, we'll be available to answer your questions. Some of you may have already submitted questions in advance through our Investor Relations team. You may also submit questions through the virtual meeting website at any time throughout the meeting. I'll now turn it over to John Stinn to take us through the formal business of the meeting.
Thanks, Kevin. The meeting is held pursuant to a notice mailed on April 16, 2020, to each shareholder of record at the close of business on March 6, 2020. With the proxies to vote delivered to the company prior to the meeting, a quorum is present at the meeting. There are 4 matters to be acted upon by shareholders. Most of our shareholders have already voted by proxy, and we have already tallied the preliminary vote.
If you have already voted by proxy, no further action is necessary unless you wish to cancel your proxy by voting electronically today. In order to vote electronically today, you must be a shareholder of record as of the record date or have a valid proxy from the shareholder of record, such as your bank or brokerage firm. And when you joined the virtual meeting, you must have entered your 16 digit control number included in your notice, proxy card and the instructions that accompanied your proxy materials. You should see an option to vote electronically through the virtual shareholder meeting website. If you have not already submitted your vote electronically and wish to do so, you may do so up until I ask for all votes to be submitted in just a few minutes.
The first matter is the election of directors. The names, bios and other information regarding director nominees are included in the proxy statement. Under our bylaws, no other nominations may be made at this meeting. The second matter is a shareholder advisory vote on our executive compensation, commonly referred to as a say on pay vote. This vote is on whether to approve the compensation of executives as disclosed in the executive compensation section of the proxy statement, including the compensation discussion and analysis and the compensation tables.
While this is a nonbinding advisory boat, our Board and management welcome this input from our shareholders as an important perspective when considering the design and implementation of executive compensation programs. As discussed in the proxy statement, we believe Under Armour has a sound executive compensation program and a strong pay for performance culture with a substantial portion of compensation directly tied to the performance of our company. The third matter is an amendment to our charter permitting the Board of Directors to provide shareholders with the right to amend our bylaws to the extent permitted in the bylaws. Currently, each of our charter and bylaws specifically provides that our Board of Directors has the exclusive power to alter, amend or appeal any provision of our bylaws and to make new bylaws. Our Board of Directors has declared advisable and recommends for your approval an amendment to our charter to remove this provision, thereby allowing both directors and shareholders to amend our bylaws in accordance with the provision of the bylaws.
Subject to your approval of the proposed charter amendment, our Board has approved an amendment to our bylaws that will allow for the bylaws to be adopted, altered or appealed by either our Board or shareholders by a majority vote. The 4th matter is the ratification of the appointment of our independent registered public accounting firm. The Audit Committee of our Board has appointed PricewaterhouseCoopers as the company's independent registered public accounting firm for 2020. The Board is submitting the appointment of PricewaterhouseCoopers for shareholder ratification as a matter of good corporate governance. Representatives from PricewaterhouseCoopers are here and available for questions later in the meeting.
Now on to the voting. If you have not yet submitted your vote and wish to vote electronically today, please do so now through the virtual meeting website. At this time, we will take a brief pause to allow you time to submit your votes electronically and for us to review them. Thank you for voting today. As I stated earlier, most shareholders have already voted by proxies delivered to the company.
With these votes cast today and the other votes previously cast, we have the following results. First, a plurality of the votes cast have been voted in favor of each of the nominees for Director. Therefore, all of the nominees for Director are duly elected. 2nd, a majority of the advisory votes cast on our executive compensation have been voted in favor of the approval of our executive compensation. 3rd, holders of not less than twothree of the voting power of the Class A Stock and Class B Stock outstanding as of the record date and entitled to vote thereon, voting together as a single class have voted in favor of the charter amendment.
Therefore, the charter amendment has been approved, and we will cause the charter amendment to be promptly filed with the state of Maryland and the bylaws amendment to be concurrently effective, permitting our bylaws to be adopted, altered or appealed by either our Board or shareholders by a majority vote. 4th, a majority of the votes cast have been voted in favor of the appointment of PricewaterhouseCoopers as our independent registered public accounting firm. Therefore, their appointment has been ratified. This concludes our voting. There is no other official business for today.
Before I turn it back over to Kevin, I would like to draw your attention to the screen, which includes our cautionary language regarding any forward looking statements that we may make in the business presentations. This is also available in our SEC filings. Now I will turn the meeting back over to Kevin.
Thank you, John. That concludes the formal part of our business for today's shareholder meeting. Before we get into our overview, I want to take a moment to give our thoughts and prayers to all those suffering from the COVID-nineteen pandemic around the world and to give our sincere gratitude to those in the front lines fighting it. This has been an uncertain time for all of us and a tragic time for many. Through it all, healthcare professionals and first responders continue working hard to protect us from the worst of this disease.
I know many around the world have offered similar sentiment and sentiment in times like this is crucial, but it becomes that much more impactful when you pair this with action. At Under Armour, we believe in the power of action. When leadership at Johns Hopkins reached out to us about their shortage of PPE, we knew that we could help, but more importantly, that it was our responsibility to do so. Baltimore is our home and we've always done everything possible to build a partnership between our home city and our company. So we got to work.
With a manufacturing footprint and some of the most innovative design teams in the world, it wasn't long before our teams developed a PPE mask that could help our Baltimore first responders. They designed a mask from a single piece of fabric built in Tennessee made from a combination of wood pulp and polyester that created a softer solution for the frontline workers. We could then cut this expedited production fabric on our own advanced equipment in the Under Armour Lighthouse. When we had to solve for the lack of sewing resources to manufacturing the product on time, our innovation team developed a really smart way to assemble the mass through an origami design that doesn't require any sewing, but could be hand assembled by hundreds of UA volunteers. This innovation drastically improved the scale and speed at which we could produce PPE.
We're cutting 300,000 origami mass components and 5,000 gallons a week. And by early June, anticipate supplying nearly 5 million masks and over 200,000 gowns to local first responders at Johns Hopkins and 40 other local healthcare institutions. To ensure we're maximizing our impact, we've made our mass design available to partners, manufacturers and any medical group interested in making PPE in support of 1st responders. Though these are challenging times, seeing teammates step up like this is exactly why I'm so proud to be a part of Under Armour. Innovation is about more than just product.
It's about building a culture where innovation permeates throughout the organization. Our culture of innovation is foundational to everything we do and has been instrumental in our ability to support healthcare professionals and first responders during the crisis. Our brand was founded on innovation and today we perpetually develop and improve our products for our target consumer, the focus performer. We remain centered in that athletic performance. We bring authenticity to athletes by delivering innovative products, solutions and experiences that athletes didn't know they needed and once they have them can't imagine living without.
At a time when health, fitness and wellness have taken center stage, our responsibility, purpose and mission are that much clearer. Our mission is to make people better. That's an immense privilege, but it's also an immense responsibility. With the vast majority of the planet now living through a new kind of war, one that attacks our individual health, we believe that even more people will be looking for ways to stay active and healthy, which plays directly into our strategy, while building on the brand premise of performance making you better, especially through the veil of this pandemic. This remains an amazing business to be in, from dedicated and casual runners whose habits have picked up to devoted team sport athletes who are craving opportunities to stay fit while their normal routines have been interrupted.
Our hearts go out to all the high school and college seniors who lost their last year of competing in a sport that they love. We promise to continue to find ways to inspire you in whatever your next chapter brings with the world's greatest performance apparel and footwear and by innovating gear to help protect you from our new reality of COVID-nineteen, while still allowing you to train and perform. We are real time proactive and aggressive in helping to solve this problem for consumers everywhere. Focused performers are looking for innovation, they're looking for performance solutions and they're looking for inspiration. That is where we thrive.
That is our DNA. That said, it's tough right now. It's tough for our teammates. It's tough for consumers trying to keep their routines. It's tough for our partner athletes who have to wait another year for the Olympics or are waiting for word on whether their seasons will be canceled.
But all of them are looking for us to help them get better. That's our job and one we'll deliver on because we are brand built on grit and underdog spirit. That resilience is central to our DNA and has formed the core of our brand campaign, The Only Way is Through. The Only Way is Through is not a slogan, it's a mindset. For our focused performers, that means working through losses, through injuries, through the off season, and now with COVID, working through isolation.
The irony in that is that the one thing we all learn from competition is that life is a team sport, our faith, our families, our countries and our brand. And for our teammates right now, that means working through challenges, working through distractions and working through uncertainty, all to make our consumers better. And the UA team is doing exactly that. I am so proud of this team and appreciative for their love and commitment to our brand. The pursuit of anything worthwhile, there will be progress and there will always be challenges.
Our job is to go through them. Right now, there are challenges for all of us, but our team will go through them. So before I hand it over, I want to take a moment to recognize the work of our CEO, Patrick Frisk. We all know it's hard work being CEO, but I don't think any of us could have predicted the setting for his 1st few months. Through it all, he's proven exactly why he's our CEO.
He's been steadfast in the face of hardship, decisive in the face of uncertainty and maintained a level of balanced calm crucial to navigating through this period. It's certainly been trial by fire, but Patrick, thank you for everything you do for Under Armour. I'm immensely grateful for your leadership, your friendship and I couldn't be more appreciative to be in the foxhole with you. We're going to win. Patrick?
Thank you, Kevin, for the kind words and your leadership. This is certainly not how I envisage my 1st shareholder meeting as CEO, and I know this is new for all of you as well. So thank you for working with us and taking the time today. I'd like to thank the entire Board for their service to our company, brand and shareholders. I appreciate your leadership, counsel and partnership as we manage through these times and work to reposition ourselves to return to growth and profitability over the long term.
Certainly, it's been a unique few months, but of course, that's what you sign up for as a CEO. As I've said before, being the leader of this company and this iconic brand has been the privilege of my professional life. During our internal town hall meeting in December, I promised Kevin I would protect this house and I intend to do exactly that. As all of you know, the past few months have been a historically difficult period for the retail industry. While our results tracked well to plan through January February, we experienced significant challenges as COVID-nineteen accelerated across the globe.
As the virus spread more than 80% of our owned stores and wholesale partner locations closed around the world in mid March, resulting in a significant revenue decline across the business. Thankfully, the meaningful balance sheet improvements and operational changes we've driven over the past few years allowed us the necessary breathing room to shift gears into a proactive defense. Coming into this period, our inventories were down, we've become cash flow positive and we've implemented a number of initiatives across the business with better systems, structures and repeatable processes in place. Because of these actions and because of the strength of our brand, we believe we're in an appropriate position to navigate the current adversity for our industry. Despite the substantial declines in global revenue since this period began, we've been encouraged by significant increases in digital app usage and the emerging strength of our e commerce business.
In our global e commerce business, our sites have remained active throughout this period and revenue has continued to show consistent strength since the start of the Q2. Around the world, we've also seen focused performers turn to Under Armour to stay active while their normal routines have been disrupted. Since mid March, new users for Map My Run are up 275% and year over year workouts in connected footwear are up 200%. Though these remain a fairly small part of our business, this validates some of the pre COVID strategic decisions we've made to drive brand consideration. So yes, the overall environment is challenging, but we believe our positioning and strategy remain fundamentally strong.
We have a transformative product, a strong pipeline, an unrivaled history of innovation, a truly unique brand and a loyal community of focused performers. Based on ongoing conversations with more than 40,000 consumers, we're confident in our brand positioning as a performance athletic company. Over the past few years, we've undertaken a comprehensive transformation to improve our strategy, our operations and our culture to fulfill our promise as the human performance company. Transformations like this are hard, but they're necessary and we believe the work we put in has positioned Under Armour to reach our full potential over the long term. As a target consumer, we believe the focused performer represents a huge opportunity that plays to our strengths and provides clarity around who we are as a brand.
It also gives us a North Star as a company as we continue to innovate and transform. It gives us all a target to work towards. So as we come into this period, we were already executing on a comprehensive multiyear transformation. And as I said on our year end earnings call, we weren't satisfied with where we had landed and focused on ways to better compete in a changing retail landscape. This included taking an in-depth look at our cost structure through a restructuring plan we announced in early April and making tough decisions about how to best invest for the future state of our company, all of which, of course, we believe will further optimize our operations, improve profitability and cash flow and create a virtuous cycle to return to profitability over the long term.
All of this is critically dependent on Under Armour product and being fundamentally more responsive to the needs of the folks' performer. Throughout 2019, we continued to create beautiful products that provided solutions for the focused performers around the world. We created an entirely new apparel innovation category with Rush, a mineral infused fabric that recycles the body's energy during moments of performance. Last fall, we combined 2 of our landmark innovations into 1 product, Coldgear Rush, to revolutionize winter training. We built on the emerging strength of our women's business with the Infinity Bra, which we launched in January.
We've significantly expanded our Hover Cushioning platform, which continues to put us into top shelf considerations with runners with the launch of the Mackinac, which even amid this global event continues to demonstrate strong momentum. The Mackinac combines an energy return of Hover with a data driven real time form coaching of Map My Run for a data driven experience and an ideal balance of cushion and spring. Platforms like Hover and Rush are revolutionary and iterative serving as the basis for continued innovations with each new season. In addition to revolutionary products, we're making significant investments in the brand. In January, we launched the largest brand campaign in our company's history, The Only Way is Through.
The Only Way is Through was launched at our Human Performance Summit, where we hosted over 175 media trainers and influencers, collectively representing 170,000,000 followers across social media platforms. As the athletic performance world has moved towards social distancing and increased digital activations, we've broadened the Only Way is through brand platform into our Through This Together manifesto. From virtual social events to curated at home workouts to an incredibly successful healthy at home fitness challenge, Through This Together has driven exceptional increases in engagement across our digital platforms. This brand platform will be crucial to helping us compete for consideration among focused performers in our home market and around the world. This is our number one strategic consumer connectivity priority, competing for consideration among focused performers.
To provide some context around what I mean by that and how we're bringing more focused performance to Under Armour, I think a fitting analogy for our consumer journey is a funnel. At the widest part of the funnel, the first step in the consumer journey is awareness, ensuring consumers are aware of the brand. The second step is consideration. Now that they're aware of the brand, it's critical that consumers are considering our brand when they're investing in athletic performance products across our categories. And the 3rd step ultimately is conversion.
We've achieved this when they're aware of the brand, they're considering us when they're making a purchase in our categories and they're converted to buying Under Armour. Our go to market strategies around the world are informed by where people are on this consumer journey. In some of our international regions, we're focusing on driving awareness. In North America, we're focused on driving consideration. Through the coronavirus has impacted some elements of this campaign's rollout, we have seen significant improvements in consideration in our home market.
Ultimately, this brand platform and these types of activations will be crucial in restoring our brand in our home market and returning our company to growth. The result of all of our efforts over the past few years is a full lifecycle end to end improvement in how we bring products to market starting with innovative concepts, executing with consistent repeatable processes and bringing them to life with a fundamentally improved consumer experience. We're consistently and constantly improving our consumer experience and going to market moving forward all of our offerings and efforts will be integrated and delivered through the human performance system. This means combining our digital capabilities with the full strength of our innovation pipeline to provide consumers with a truly comprehensive offering. Utilizing our consumer data and insights from top athletes, coaches and fitness scientists, we're coming to market hyper engineered to perfect our consumers' personal training, competition and recovery journey.
Our relentless focus on product innovation combined with our digital platforms will give our consumers the human performance system to make you better. All of these actions give me a tremendous amount of confidence in the future of Under Armour. Fundamentally, we are running a better company today than ever before. We improved operational processes across the business. We're managing a stronger balance sheet.
We're controlling our costs more effectively. We're investing in the brand and we're driving consideration in our whole market and around the world. The challenges of this period in no way diminish the actions we've driven over the past few years. On the contrary, we believe these improvements will enable us to weather this storm, will be foundational to our participation in the recovery of demand and will prove essential as we pursue our potential over the long term. Going forward, we believe this brand is uniquely positioned as the world becomes increasingly focused on health and wellness.
Consumers know Under Armour as a brand rooted in athletic performance and we've built on a legacy with a digital offering that delivers the fitness and wellness insights they need now more than ever. As the world looks to get fit and healthy, Under Armour will deliver with the human performance system. Central to our recovery, of course, is the reopening of retail around the world. At this point, we've only opened a handful of our own retail stores in North America and Europe adding to existing reopenings in China and South Korea where most of our stores have already reopened. As with many things in a post COVID world, the safety protocols we put in place have changed the Under Armour experience our consumers have come to know and love, but they're crucial to a responsible reopening of our business.
To be clear, we are not expecting a quick return to normal. There are a number of uncertain variables and we expect the road ahead to be bumpy, but we feel prepared and the restoration of our retail business around the world is a big step towards a return to normal operations. As I've said before, it's all too fitting that our brand platform is the sentiment we all need to internalize, the only way is through. And with that, I'll hand it over to Dave to provide an update on our financial position.
Thank you, Patrick. Since we've already covered off on the strategic and operational elements of what we're focused on to manage our business during this crisis, I'd like to provide some color on the financial part of these efforts. But first, let's take a quick look back at 2019, which honestly at this point seems like a very long time ago. Revenue was up 1% to $5,300,000,000 in 2019. From a gross margin perspective, we drove a 180 basis point improvement to 46.9%, which benefited from multiple supply chain initiatives and channel mix benefits from reduced sales to the off price channel.
And we ultimately finished 2019 with operating income of 237,000,000 dollars and diluted earnings per share of 0 point A few highlights include a 41% increase in cash and cash equivalents to 788,000,000 dollars along with prioritizing and managing capital expenditures down 7% year over year to 144,000,000
which
is at the low end of our targeted 3% to 5% CapEx to revenue planning principle. Also driving inventory down 12% to $892,000,000 through improved planning and supply chain management. And we're ultimately able to drive $509,000,000 of cash flow from operations. But obviously, a lot has happened since we closed out 2019. So let's fast forward to 2020, today, where we are all managing through very different and unprecedented times.
Relative to our 2020 outlook, a high level of uncertainty related to an inability to determine the duration and scope of the COVID-nineteen pandemic and its economic ramifications means that we cannot reasonably estimate impacts on our full year at this time. We do, however, expect these conditions to have a significant adverse impact on full year financial and operating results. As such, we quickly mobilized to begin driving through multiple cost base improvement actions and liquidity preservation initiatives. Relative to our cost base, we are targeting a reduction of our originally planned 2020 operating expenses of approximately 325,000,000 dollars Within that, we had already started down the road of a 2020 restructuring plan and thus the 325,000,000 in savings includes the operating expense benefits from the $40,000,000 to $60,000,000 of expected pre tax restructuring plan savings previously disclosed. Outside of the expected savings from restructuring efforts, I'd like to touch on the other larger expense reductions.
Relative to marketing, with limited visibility into the larger impacts of the virus on consumer demand and behavior, we are reducing certain marketing efforts during this period and focusing funds predominantly on digital activations. We are also reducing incentive compensation for the year. In mid April, we temporarily laid off teammates in our U. S. Retail stores and distribution centers.
Although I am pleased to report that we are recalling many of these teammates as we begin reopening our U. S. Retail stores and as e commerce business is increasing. We are also tightening our hiring, contract services, travel and other discretionary and variable costs. And lastly, we are prioritizing and reducing our capital expenditures, which will provide some reduced depreciation expense benefits as well.
In conjunction with the cost based management efforts, we are also driving through multiple cash and capital preservation efforts to ensure that we not only drive through this COVID-nineteen crisis, but also ensure we come out on the other side with the strength and ability to support long term growth. We ended the Q1 with $559,000,000 of cash on the balance sheet and we currently have approximately $700,000,000 of borrowings outstanding under our revolving credit facility. We quickly mobilized in late March early April to identify and begin initiating multiple cash and capital preservation initiatives, not knowing the ultimate extent or depth of the upcoming COVID-nineteen impacts. From an inventory perspective, we ended the Q1 with inventory up 7% to $940,000,000 which was in line with our original expectations, even with the unplanned COVID-nineteen pressures to March revenue. Moving forward, in anticipation of significant changes in future demand, we quickly started and continue to proactively reduce planned inventory receipts to continue to manage this asset as efficiently as possible given expected compounding global factors.
We have also been prudently balancing the negotiation of extended payment terms with our customers and our vendors to mitigate risks. We're also working with retail lease partners to defer or abate applicable rent during store closure periods. From a capital expenditures perspective, with the deferral and prioritization of certain investments, our planned capital expenditures are now expected to be approximately $100,000,000 compared to our previous expectation of approximately $160,000,000 in 2020. When more favorable business conditions materialize, we would expect to resume many of these investments with adjustments based on new considerations as warranted. These capital preservation actions along with the cost based reduction efforts I previously mentioned are working in tandem to help protect our current and future cash flows.
In addition to these efforts, we recently took further actions to help protect and strengthen our liquidity. On May 12, we completed an amendment to our credit facility, which moved us to a secured facility, while also adding financial flexibility in the near and midterm through beneficial covenant updates through Q1 of 2022. And further to that, on May 21, we raised 440,000,000 which could increase by another 60,000,000 this week through new convertible senior unsecured notes aimed at further strengthening our already strong liquidity position, which is now at about $1,900,000,000 including cash on the balance sheet and additional capacity within our revolving credit facility. In summary, with all these measures working in concert, we believe that Under Armour is well positioned to navigate through and beyond this global crisis. And beyond that, when you put together a robust market growth opportunity over the long term, a powerful global brand with global scale, executing against a focused strategy that's led by a talented team, you get a strong set of competitive advantages that we believe position us to realize Under Armour's full potential over the long term.
Lastly, to reiterate what we said on our earnings call 2 weeks ago, we will do more than endure through this. We believe that on the other side of all this, we will ultimately emerge stronger. Thank you and we appreciate your time. That concludes our prepared remarks and we will now transition to the live question and answer session.
So Lance, are you receiving the questions?
Yes. Thank you. Just waiting for the operator to come back on, but looking sure. Okay. Thank you.
With that, we'll open up our Q and A section of the meeting. To start, we have a question around North America continuing to trail behind the rest of the world's performance and what we're doing specifically to help return the company to being competitive in the United States and overall helping the whole company become more profitable over the long term. I think Patrick and Dave maybe tag team that one. Sure, Lance. This is Patrick.
I'm more than happy to start out, and I'll hand it over to
Dave. I would like to make sure that it's very clear that we've done a lot of deep work over the last 2.5, 3 years to really truly understand, 1st of all, our place in the world. And we did a lot of work, as we talked about, on this video as well in terms of talking to over 40,000 consumers around the world to really understand our opportunity in the athletic space. And we are focused on athletic performance. That's the space that we're going to be competing in.
We believe that over time, we can double our market share in athletic performance. We've also identified who we're for. We're for the focused performer, a very defined competitive mindset in an active use location inside of athletic performance. We believe that space has plenty of runway for Andron going forward. And based on all of this work, we've also now defined our positioning inside that space as a human performance company.
And then as we think about this, the strategy that we're deploying to win in the marketplace in North America and around the world where we compete, we really break it into 4 pillars, 4 key pillars, if you like. And those 4 key pillars are around product, story, service and team. And with the product, the way we think about it here in terms of how we drive that strategy is we need to utilize deep athlete insight to create absolutely industry leading performance product innovations that can solve the problems that focused performers have and at the same time inspire them to push beyond their limits. Our focus right now is very much around, of course, our core, which is our team sport, but also more and more around run, train, footwear and women's. And we're very excited about some of the developments we're seeing in women's right now with some of our new innovation.
We're also intent on reducing off price sales and elevating the premium positioning of the brand in North America. And of course, as we do this, we will continue to optimize segmentation and make sure that we're premium at every price point where we compete. We want to make sure we tell a robust global brand story, and we believe that in 2020, as our go to market has really come fulfilled to hit the marketplace in our campaign that began as The Only Way is Through and that has now pivoted to the Through This The Other Manifesto and make sure that it's authentic, it's consistent and that we deploy a digital first always on go to market approach when we do our brand campaigns and tell our brand stories. It's important for us to drive meaningful scale, growth and improvement in brand loyalty over time, as I told you about in my prepared remarks around the awareness, the consideration and then ultimately, the conversion aspects of what we do. And service, of course, we've dramatically improved our ability to service our business.
And I think one of real manifestations of that has been through this COVID-nineteen epidemic that we currently have going on or pandemic, sorry, where we've been able to very quickly drive an enhanced digital e commerce business around the world. We've been able to keep our warehouses and PCs open through this time, and we've been able to meet the demand from the consumer as they wanted to engage with us more deeply around our e commerce business and also to service our wholesale accounts in their e commerce business. But of course, if you think about it longer term, it's really about delivering a pristine and sustainable service to our consumers, the focus performers, through more premium experiences, greater speed and a very consistent operational excellence machine, if you like. And we believe that over time, we'll also need to be able to distort this service towards a higher D2C component, including e commerce. And of course, our team, our team, our team enable our teammates to reach their full professional potential through what we do in development and developing them and through diversity, of course, and engagement as well as leadership.
And when we take all of that down into North America, we are very intent on and we will return to growth, of course, in North America. It's our home market. It's our most important market right now, and we're doing a lot of great initiatives around returning to growth. Specifically, I'd like to call out 3 different initiatives. 1st, win with the winners in wholesale.
This is about earning back shelf space with our key partners, and we believe we're doing just that through a very sharp focus on product innovation and segmentation. We're increasing our marketing effort. That's part of the work that we've done this year in this Through Together campaign manifesto that's rolling right now. And how we evolve that further in this fall to return back to the only way is through campaign and to support all of our product initiatives as well as our wholesale partners, of course. Build a stronger brand.
We talked about the fact that in North America, we're going to be driving consideration going forward. And a lot of that has to do with better activating our roster of athletes and influencers and continuing to amplify the brand through the execution of the brand platform that I talked about, The Only Way is Through, and making sure that we're investing behind the brand, which is, of course, our intent. And we will continue on the back of that to overdrive operational improvements. We've done a lot of work over the last 3 years in terms of our systems, our structure and our process and that are now enabling us to better serve our consumers. And that's, of course, a really important part of ensuring that we become their brand of choice.
And then when we think about the importance of this in this moment in time during the COVID pandemic, the work that we've done over the last few years to make sure that we have our inventories in order and now adding to that a much better planning functionality through our demand and supply planning will also ensure that we're navigating the current rebalancing of inventories towards the back half of the year better than we've ever been able to do before. And on top of all of that, the importance of direct consumer, of course, going forward, making sure that we're evolving our company to be able to meet the consumer whenever and however they like to engage with us through human performance system will be incredibly important. So Dave, maybe you want to add a little bit around the SG and A and the financials in terms of liquidity here too in terms of how we're handling that going forward?
Sure, Patrick. Obviously, profitability is a huge focus for us near term, long term as well. And there's a couple of different areas there. From a gross margin perspective, obviously, this year, unfortunately, we're going to be weighed down by a very promotional environment, we believe, through the rest of the year and some rising inbound logistics costs. But longer term, as we go into next year and beyond, there should continue to be benefits and availability there relative to our DTC mix increasing and also continued product costing improvements from all of our past and current supply chain initiatives.
And then when you get down in the SG and A and cost structure and driving profitability there, independent of COVID-nineteen impacts, it's certainly our intent to better leverage our SG and A in the future and we're continuing to drive through that. We launched into our 2020 restructuring plan, which is really chipping away at a lot of the fixed portion of our SG and A and continuing to allow us to balance better and focus and invest in the areas like international marketing and digital while leveraging those other areas in our cost structure and driving that further. And then relative to the impacts of COVID-nineteen this year, that's where we've mentioned a much deeper dive and really taking that opportunity to go further, and we're carving out about $325,000,000 out of our originally planned 2020 cost structure, as I mentioned earlier. So we are driving on every front there. And I think we're the deeper work that we're doing using COVID-nineteen a little bit as a catalyst as well, I think is going to set us up even better to be able to drive more effectively in 2021 and beyond.
Okay, great. I guess specifically building on that, a couple of questions came in. So kind of blending those together, given cash and liquidity is crucial during this pandemic, has the company maintained its ability to sell accounts receivables as credit as customer credit ratings weaken? And how do you feel about being positioned with respect to cash burn, the ability to go long if a second wave came back this fall or winter for COVID-nineteen?
Yes, Matt, this is Dave. I'll take that one as well. Yes, we've proactively jumped into a lot of capital preservation initiatives coming into late March, early April and through now and continuing forward. We're proactively managing our inventory receipts. We're prudently balancing negotiations with our customers relative to payment terms and also all of our vendors, both inventory and non inventory on payment terms, working with landlords on abatement or deferral negotiations.
We talked about the CapEx reduction. We've taken about $60,000,000 of our CapEx forecast, brought it down to $100,000,000 planned for this year. And then also all of the cash benefits of the savings initiatives that we're driving within that $325,000,000 reduction. So all of those are coming together to help preserve our liquidity. And then we further bolstered that by 2 big moves in May as well.
1 was amending our credit facility, which gave us a lot more favorable covenants and therefore much better access to liquidity. And so we had about $1,400,000,000 or so currently just through that amendment of liquidity availability from cash and revolver. And then also, we drove through the convertible bond offering recently to even further solidify and give us even more capital. So now in a position where we have approximately $1,900,000,000 of liquidity available through cash and revolver availability, which really helps fortify and support our future for growth. And relative to our AR sale program, we still have those agreements in place with the banks to be able to support that.
We have not really utilized that much at all over the last few years. We don't anticipate having to use it much right now. Those are case by case basis based on the customers that you work with and the banks that you work with. So yes, there could be some limitations around that in the future, but right now, we're not anticipating having to utilize that source anyway.
Okay. Thank you. 3rd question is, as a shareholder, I believe there's a perception that Under Armour has lost its innovation edge. What are you doing to amplify that? And when can we expect to feel a difference?
Hi, Lance. This is Patrick. I'll take this one. Yes, I'm very thankful for that question because it is one of the things that I'm very, very excited about. We believe that the work we've done over the last few years to really deepen our knowledge around what innovation actually matters to the consumer and how we've set up our innovation team to really drive innovations for the future is going to be paying big results for Underolven going forward.
We believe our innovation pipeline right now is We started the Humber campaign, We started the HOVR campaign 2 years ago with 2 models that expanded last year into 7 models in footwear. And now you see the real manifestation of that in our Makena that just launched in February of this year and is doing incredibly well in the market right now. And it isn't just a very innovative shoe. It's also the fact that you can digitally connect it through our Map Myron app and actually be coached while you're running, which is absolutely unique in the running space. That's one way that we're innovating.
And you will see more great innovations in run from Under Armour going forward. But it isn't just there. It's also in some of our traditional areas like the Bryce Harper fleet that was the best selling baseball fleet right before the pandemic hit here early in the spring or the new women's Infinity bra and meridian leggings that are on our side right now and are selling through incredibly well where we feel that we have now taken a big step forward in resonating with women in the purely active space and certainly being helped by the workout at home trend that's become so prevalent during this pandemic. But we feel very good about the pipeline and the depth of the pipeline and the insights we're using to drive that pipeline going forward. So you'll hear a lot about Under Armour innovation going forward.
Great. Next question. Is Under Armour focusing any significant marketing efforts on fitness at home while many individuals are homebound and or prefer not to use recently opened gyms?
Yes. I think as we were able to rejig our teams and go from this, the only way is through to what we call now the through this together manifesto. We went completely digital. And what I can say is that it was an incredible achievement by our teams to be able to do it so quickly and to really respond to the consumer demand out there. But it was also a fantastic support through all of our influencers and athletes.
Over 75% of our roster activated and helped us get this out through their own platforms as well as our platforms. On top of that, we've also seen the engagement go up dramatically on, especially in Map My Run, of over 2 75% and the connected footwear that we have, the number of shoes being connected during this period has also gone up by about 200%. So not only is our product selling through better in terms of the innovative product, but we've also seen a much, much increased engagement from the consumer because we've been able to accommodate them as they're training and working out at home.
Great. Next one is, I understand you had team member reductions at retail and distribution centers. Did you also reduce labor and expense at the corporate offices? Dave?
Sure. Yes. In addition to the previous North America retail and distribution center layoffs, we also did reduce executive and board compensation. We've also reduced incentive compensation as well. And then in addition, as previously mentioned, in total, we're driving down our SG and A in total by about $325,000,000 versus our original 2020 plan, which includes what I just mentioned, but it also includes the benefits of what we're driving through on the restructuring plan, but also includes the benefits relative to the marketing reductions and the all the other discretionary and variable buckets that we're driving down, whether it be T and E, consulting, etcetera.
So it's a pretty holistic drive there to be able to reduce the cost structure.
Okay, great. Next question would be, looks like say and pay. So subtracting Mr. Plank's votes on the executive compensation issue, what was the vote? In other words, what did non executive shareholders have to say about executive compensation?
Probably for John, I guess.
Thanks, Vince. I'll take this. This is John Stanton, Corporate Secretary. Yes, this year, shareholders did overwhelmingly vote in favor of our executive compensation program. We'll put out an 8 ks in a few days to report the final votes, including the ones that we received today.
But even backing out Kevin Plank's votes, it was an overwhelmingly positive vote, well over 90% based on the preliminary voting results. So this is something that we every year really do welcome this input from stockholders on executive compensation and the compensation committee and the Board listen to that feedback and respond where appropriate on that. So and we continue to believe we have a solid executive compensation program with a continued strong pay for performance approach. And again, I think the votes this year reflected that. So a very, very strong load of confidence from shareholders on that.
And due to the time constraints coming up on around an hour, we'll take our last question as being with Under Armour stock trading at about a 9 year low, there are many shareholders who have lost a lot of value by investing in the company. Why should we continue to believe that there's upside at this point? I'd like to turn that over to Kevin.
Thanks, Lance. Let me just start by saying like all of our fellow shareholders, all of my fellow shareholders, is that we're disappointed in the stock performance. But unquestionably, we believe in our leadership, our strategy and our direction. This is our 15th year as a public company and we continue to push forward on the strategy and executing the playbook that we've written. And this has been a painstaking process of positioning ourselves for the next leg of growth for this brand and getting ourselves to really be able to amplify what it means to be a global brand.
You're owners, we're owners and we're in the trenches working harder than ever to earn it for you and for all of us. So every day we come to work aware of the trust that you place in us, and we want you to know that we remain committed to delivering on our long term shareholder value and building that as well as the whole team is working harder as well as smarter than ever to move business forward, protectively built and set us up for that long term success. We are executing currently to use this crisis opportunity to emerge even stronger and more consistent for excellence in product for our consumers and performance for our shareholders. So we want you to know that this team is undoubtedly committed, dedicated, working hard each and every day. And we like what we're seeing coming out of this and are incredibly optimistic and believe in what we're doing in the plan.
So our heads are down and we'll continue to execute at that point. So Lance, I know you said that I was going to wrap it up and maybe we'll turn it to the operator, but we do just want to thank everyone for all of your confidence and trust in this brand, and we expect to be able to deliver for you. Thank you all very much for your time today. Operator?
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.