WS Investor
12 May 2026, 17:22
Under Armour Tumbles 18% as Tariffs, Restructuring Costs, and Weak Outlook Weigh Heavily
May 12, 2026 | NYSE: UA
Under Armour is the day's worst earnings-driven performer, shedding 18% after reporting a full fiscal year of declining revenue, margin compression, and a fiscal 2027 outlook that offers little reason for near-term optimism.
Full-year fiscal 2026 revenue fell 4% to $5.0 billion, with North America — the core market — down 8% to $2.9 billion. International provided some offset, growing 4% in reported terms, but was essentially flat in constant currency. Footwear was the weakest category, declining 11% for the year. Gross margin contracted 240 basis points to 45.5%, pressured by higher tariffs, pricing headwinds, and unfavorable mix. The full-year net loss was $496 million, inflated by a $247 million valuation allowance on US deferred tax assets — a meaningful signal that management has limited near-term visibility into domestic profitability. Adjusted net income was a thin $50 million.
The restructuring program, originally expected to cost $255 million, has now crept to a projected $305 million total, with completion pushed to December 2026. That kind of cost overrun on a turnaround plan erodes investor confidence in management's ability to forecast and execute.
The fiscal 2027 outlook did little to help. Revenue is expected to decline again, albeit slightly. Gross margin improvement of 220 to 270 basis points is largely dependent on an assumed reversal of IEEPA tariff costs — a political and regulatory assumption rather than an operational achievement. Adjusted operating income of $140 to $160 million assumes roughly $70 million in tariff refunds materializing. Strip that out and the underlying earnings power looks very modest.
With North America still shrinking, the brand repositioning still underway, and profitability reliant on external factors outside management's control, the market's 18% verdict today reflects a company that has yet to give investors a clear reason to believe the worst is behind it.
May 12, 2026 | NYSE: UA
Under Armour is the day's worst earnings-driven performer, shedding 18% after reporting a full fiscal year of declining revenue, margin compression, and a fiscal 2027 outlook that offers little reason for near-term optimism.
Full-year fiscal 2026 revenue fell 4% to $5.0 billion, with North America — the core market — down 8% to $2.9 billion. International provided some offset, growing 4% in reported terms, but was essentially flat in constant currency. Footwear was the weakest category, declining 11% for the year. Gross margin contracted 240 basis points to 45.5%, pressured by higher tariffs, pricing headwinds, and unfavorable mix. The full-year net loss was $496 million, inflated by a $247 million valuation allowance on US deferred tax assets — a meaningful signal that management has limited near-term visibility into domestic profitability. Adjusted net income was a thin $50 million.
The restructuring program, originally expected to cost $255 million, has now crept to a projected $305 million total, with completion pushed to December 2026. That kind of cost overrun on a turnaround plan erodes investor confidence in management's ability to forecast and execute.
The fiscal 2027 outlook did little to help. Revenue is expected to decline again, albeit slightly. Gross margin improvement of 220 to 270 basis points is largely dependent on an assumed reversal of IEEPA tariff costs — a political and regulatory assumption rather than an operational achievement. Adjusted operating income of $140 to $160 million assumes roughly $70 million in tariff refunds materializing. Strip that out and the underlying earnings power looks very modest.
With North America still shrinking, the brand repositioning still underway, and profitability reliant on external factors outside management's control, the market's 18% verdict today reflects a company that has yet to give investors a clear reason to believe the worst is behind it.
