NYSE:UAA

Track all markets on TradingView - Prices are not updated in real time
Under Armour Stock Drops 2.7% as Weaker Demand Forces Revenue Outlook Cut

Under Armour (NYSE: UA, UAA) shares fell about 2.7% Friday after the sportswear company reported fiscal first-quarter 2027 results and sharply lowered its full-year revenue expectations, as weak demand in North America and Asia-Pacific overshadowed substantial gross-margin improvement and an unchanged profitability outlook.

Fiscal Q1 revenue declined 3% year over year to $1.1 billion, or 4% on a constant-currency basis. North America remained the largest pressure point, with revenue falling 9% to $610 million.

International revenue increased 5% to $490 million, but performance varied considerably by region. EMEA grew 12%, while Asia-Pacific declined 7%.

Footwear and E-Commerce Show Particular Weakness

The details of the quarter reinforced concerns about underlying consumer demand.

Direct-to-consumer revenue fell 6% to $437 million, including a 12% decline in e-commerce. Wholesale revenue decreased 2%.

Footwear was particularly weak, with revenue falling 8% to $245 million. Apparel declined 2% to $734 million, while accessories decreased 4%.

Despite the revenue weakness, profitability showed meaningful improvement. Gross margin expanded 590 basis points to 54.1%, helped substantially by refunds related to tariff costs recorded in fiscal 2026.

Adjusted operating income reached $52 million, while adjusted net income was $21 million, or $0.05 per share.

Under Armour Cuts Fiscal 2027 Revenue Outlook

The major negative catalyst for UA shares was management's revised sales forecast.

Under Armour now expects fiscal 2027 revenue to decline at a mid-single-digit percentage rate, substantially worse than its previous expectation for only a slight decline.

North American revenue is now expected to fall by a mid-single-digit percentage, compared with the previous low-single-digit decline forecast.

The company also reversed its growth expectations for two international regions. Both Asia-Pacific and EMEA are now expected to record low-single-digit revenue declines; previously, Under Armour had forecast low-single-digit growth in both markets.

Management cited softer demand, particularly in North America and Asia-Pacific.

Profit Guidance Remains Intact

Importantly, Under Armour did not reduce its adjusted profitability forecast.

Adjusted operating income is still expected at $140 million to $160 million, while adjusted EPS guidance remains $0.08 to $0.12.

The company plans to offset weaker sales through more aggressive expense management. SG&A is now expected to decline at a high-single-digit rate, compared with the previous expectation for a low-single-digit decrease.

Gross margin is still projected to expand by 220 to 270 basis points, although approximately 150 basis points of that improvement is expected to come from recovery of prior-year tariff costs.

Why Is UA Stock Down 2.7% Today?

The selloff appears primarily driven by the deterioration in Under Armour's revenue outlook rather than the current quarter's profitability.

A shift from a "slight" full-year revenue decline to a mid-single-digit contraction represents a meaningful reduction in demand expectations. More concerningly, weakness is broadening beyond North America, with Asia-Pacific and EMEA forecasts moving from growth to contraction.

Maintaining adjusted profit guidance is positive, but investors may question the quality and sustainability of earnings if they increasingly depend on cost reductions while sales continue falling. Part of this year's margin improvement also comes from tariff refunds rather than underlying operating gains.

Under Armour's turnaround therefore faces a key test: management is succeeding in protecting profitability and reducing discounting, but Friday's 7% decline suggests investors want evidence that its strategy can eventually stabilize demand and return the brand to sustainable revenue growth.
💬
Author
Global Finance News 08-07-26
Under Armour Reports Q4 and Fiscal 2025 Results, Offers Q1 FY2026 Outlook

Baltimore, May 13, 2025 – Under Armour, Inc. (NYSE: UAA, UA) released its unaudited financial results for the fourth quarter and fiscal year ended March 31, 2025, showing revenue declines but improvement in gross margins and progress in restructuring efforts. CEO Kevin Plank emphasized the company's ongoing strategic reset aimed at sustainable and profitable growth.

Fourth Quarter Fiscal 2025 Highlights
• Revenue: $1.18 billion, down 11% YoY (down 10% currency neutral)
o North America: $689 million (-11%)
o International: $489 million (-13%)
 Asia-Pacific: -27%
 EMEA: -2%
 Latin America: -10%
• Product Revenue: Apparel down 11%, Footwear down 17%, Accessories up 2%
• Channel Revenue:
o Wholesale down 10% to $768 million
o Direct-to-consumer down 15% to $386 million
o eCommerce down 27%
• Gross Margin: Improved by 170 bps to 46.7%
• Operating Loss: $72 million; adjusted loss was $36 million
• Net Loss: $67 million; adjusted net loss was $35 million
• Adjusted EPS: ($0.08)
• Inventory: Down 1% to $946 million
• Cash: $501 million, no outstanding borrowings

Full Year Fiscal 2025 Summary
• Revenue: $5.16 billion, down 9% (currency neutral)
o North America down 11%, International down 6%
o Footwear declined 13%; Apparel 9%
• Gross Margin: Improved 180 bps to 47.9%
• Operating Loss: $185 million; adjusted operating income was $198 million
• Net Loss: $201 million; adjusted net income $135 million
• Adjusted EPS: $0.31
• SG&A Expenses: Rose 8% to $2.6 billion, though adjusted SG&A fell 2%

Restructuring and Transformation Plan
• Under Armour recognized $89 million in charges under its Fiscal 2025 restructuring plan
o $55 million cash-related
o $34 million non-cash
• Additional charges expected in FY2026
Share Repurchase Program
• Repurchased $25 million in shares during Q4
• Total repurchases under the $500 million program (approved May 2024): $90 million (12.8 million shares)

Q1 Fiscal 2026 Outlook
• Revenue: Expected to decline 4–5% YoY
o North America down 4–5%, EMEA growth in high-single digits, Asia-Pacific decline in mid-teens
• Gross Margin: Projected to rise 40–60 bps YoY
• Operating Income: GAAP range of $5–15 million; adjusted range $20–30 million
• EPS: GAAP range of ($0.02)–$0.00; adjusted EPS between $0.01–$0.03

Store Count as of March 31, 2025
• North America: 195 doors (180 Factory House, 15 Brand House)
• International: 246 doors
• Total company-owned doors: 441 (up 1 from 2024)
💬
Author
The Investor 05-13-25