Under Armour — First Quarter Fiscal 2027 Earnings Summary

Financial Performance

• Total revenue decreased 3% year-over-year to $1.1 billion ($1.098 billion), with a 4% decline in constant currency.
• Gross margin increased 590 basis points to 54.1% (from 48.2% in the prior year), driven by refunds received for International Emergency Economic Powers Act (IEEPA) tariff costs expensed in fiscal 2026.
• Operating income was $47 million, compared to $3.3 million in the prior year; adjusted operating income was $52 million.
• Net income was $1 million (diluted EPS $0.00); adjusted net income was $21 million (adjusted diluted EPS $0.05).
• SG&A expenses increased 2% to $543 million; adjusted SG&A increased 4% to $541 million, excluding $2 million in transformation expenses.
• Restructuring charges totaled $4 million.
• Inventory decreased 3% to $1.1 billion.
• Cash and cash equivalents totaled $396 million at quarter-end.
• Borrowings outstanding under the $1.1 billion revolving credit facility were $200 million.
• Senior Notes due 2026 were settled and discharged using funds from restricted investments upon maturity on June 15.

Guidance and Future Outlook

• Fiscal 2027 revenue is now expected to decline at a mid-single-digit percentage rate, revised from a prior outlook of a slight decline, driven by softer demand in North America and Asia-Pacific.
• Fiscal 2027 gross margin is still expected to increase 220 to 270 basis points versus the prior year; approximately 150 basis points of this improvement is attributed to IEEPA tariff cost recoveries.
• Fiscal 2027 SG&A expense (including transformation expenses) is now expected to decrease at a high-single-digit rate, revised from a prior low-single-digit decline expectation.
• Fiscal 2027 operating income remains expected to be in the range of $96 million to $116 million.
• Fiscal 2027 adjusted operating income remains expected to be $140 million to $160 million.
• Fiscal 2027 diluted loss per share is now expected to range from $0.01 to $0.05, revised from a prior expectation of breakeven to a loss of $0.04.
• Fiscal 2027 adjusted diluted earnings per share remains expected to be $0.08 to $0.12.
• The updated outlook includes an approximate $70 million benefit from prior-year IEEPA tariff refunds and approximately $35 million in headwinds related to the conflict in the Middle East.

Business Segments and Product Lines

• North America revenue declined 9% to $610 million; international revenue increased 5% to $490 million (up 2% in constant currency).
• EMEA revenue increased 12% (up 10% constant currency), Asia-Pacific decreased 7% (down 10% constant currency), and Latin America increased 8% (up 1% constant currency).
• Wholesale revenue decreased 2% to $638 million; direct-to-consumer (DTC) revenue decreased 6% to $437 million.
• Within DTC, owned-and-operated store revenue declined 3%, and eCommerce revenue decreased 12%, representing 29% of total DTC revenue.
• Apparel revenue decreased 2% to $734 million; footwear revenue declined 8% to $245 million; accessories revenue decreased 4% to $96 million.
• Total company-owned and operated doors were 438 at June 30, 2026, down from 442 at June 30, 2025.

Market and Competitive Landscape

• The company cites a challenging consumer demand environment, particularly in North America and Asia-Pacific.
• Management is focusing on balancing near-term revenue opportunities with actions to strengthen long-term brand health, including disciplined marketplace management and protection of full-price selling.
• The company aims to drive a more premium Under Armour brand through clearer storytelling and a sharper product portfolio.

Risks and Challenges

• Unfavorable foreign exchange impacts and unfavorable regional and channel mix partially offset gross margin gains.
• Pricing headwinds and supply chain headwinds related to the conflict in the Middle East are noted as challenges.
• The Fiscal 2025 Restructuring Plan has incurred $266 million in total costs to date ($116 million cash, $150 million non-cash), with total program costs anticipated to be approximately $305 million.
• The restructuring plan is expected to be substantially complete by December 31, 2026.

Management Commentary and Tone

• CEO Kevin Plank stated the company is navigating a challenging consumer demand environment while making progress in building a more focused Under Armour.
• Management emphasized operating with greater discipline, protecting profitability, and investing in a sharper product portfolio to consistently earn demand at full price.
• The tone reflects a focus on simplifying the business and aligning operating expenses with the current demand environment while prioritizing high-return strategic investments.

Other Key Points

• The company recorded $4 million in restructuring charges and $2 million in transformation-related SG&A expenses under the Fiscal 2025 Restructuring Plan in the first quarter.
• Total costs incurred under the Fiscal 2025 Restructuring Plan to date are $266 million.
• Senior Notes due 2026 were fully satisfied and discharged during fiscal 2026.
• The conference call and webcast for the first quarter fiscal 2027 results were held on August 7, 2026.