Under Armour, Inc.

What they do

Under Armour designs, develops, markets, and distributes branded performance apparel, footwear, and accessories for men, women, and youth. It sells through wholesale channels (national, regional, independent retailers, distributors) and direct-to-consumer (owned stores and e-commerce). In fiscal 2026, apparel, footwear, accessories, and licensing represented approximately 68%, 22%, 8%, and 2% of net revenues, respectively.

Revenue drivers

• Apparel — Largest product category, representing ~68% of net revenues in fiscal 2026. Includes performance apparel with technologies like COLDGEAR, HEATGEAR, UA RUSH, and UA STORM.
• Footwear — Second-largest category at ~22% of fiscal 2026 net revenues, covering running, training, basketball, cleated sports, recovery, and outdoor. Revenue declined 10.8% in fiscal 2026.
• Direct-to-consumer (DTC) — Channel includes owned Brand and Factory House stores and e-commerce. Fiscal 2026 DTC revenue decreased 1.7%; in Q1 FY2027, DTC revenue declined 6% to $437 million.
• North America — Largest geographic market. Fiscal 2026 North America revenue decreased 7.9%; in Q1 FY2027, it declined 9% to $610 million, with softer demand cited.

Recent performance

In the first quarter of fiscal 2027 (ended June 30, 2026), Under Armour reported revenue of $1.10 billion, down 3% year-over-year (down 4% constant currency). Net income was $1 million (EPS $0.00) versus a net loss of $2.6 million in the prior-year quarter. Gross margin improved 590 basis points to 54.1%, driven by refunds related to IEEPA tariff cost recoveries. Inventory decreased 3% to $1.1 billion, and cash and equivalents totaled $396 million at quarter-end. For fiscal 2026, full-year revenue was $4.97 billion, net loss was $495.6 million, and diluted EPS was -$1.16.

Strategy

Management is executing a 'Fiscal 2025 Restructuring Plan' to strengthen financial and operational efficiencies, with total charges now estimated at ~$305 million. The plan includes employee severance, contract terminations, facility and software impairments, and transformational initiatives; it is expected to be substantially complete by December 31, 2026. Under Armour is focused on elevating brand positioning, simplifying its operating model, accelerating innovation, and improving global go-to-market execution. The strategy also includes enhancing digital consumer engagement and building a more premium brand that can 'earn demand at full price,' as stated by the CEO.

Risks

• Discretionary spending decline — Consumer purchases of discretionary items can decline during economic downturns, inflation, or uncertainty, directly hitting sales and profitability.
• Tariff and trade policy exposure — Substantially all manufacturers are outside the U.S.; tariffs, sanctions, or import restrictions (like IEEPA tariffs) can increase costs and disrupt operations.
• Demand softness in key markets — Challenging conditions in North America and Asia-Pacific have driven revenue declines, and management notes softer demand continues.
• Restructuring execution risk — The restructuring plan involves significant charges and operational changes; failure to achieve expected efficiencies could hurt financial performance.

Outlook

For fiscal 2027, management updated revenue expectations to a mid-single-digit percentage decline (previously slight decline), reflecting softer demand in North America and Asia-Pacific. They maintained their full-year profitability outlook, focusing on disciplined marketplace management and protecting full-price selling. The restructuring plan is expected to be substantially complete by December 31, 2026.