Under Armour — Second Quarter Fiscal 2027 Earnings Summary

Financial Performance

• Total revenue decreased 7% year-over-year to $1.2 billion for the quarter; six-month revenue declined 5.2% to $2.34 billion.
• Gross margin decreased 30 basis points to 47.0% for the quarter, down from 47.3% in the prior year period.
• Selling, general and administrative (SG&A) expenses decreased 4% to $557 million for the quarter; adjusted SG&A decreased 3%.
• Operating income was $15 million for the quarter; adjusted operating income was $25 million.
• Net loss was $0.4 million for the quarter; adjusted net loss was $2 million.
• Diluted loss per share was $0.00 for the quarter.
• Inventory increased 4% to $1.1 billion.
• Cash and cash equivalents totaled $285 million at quarter-end; $190 million was outstanding under the $1.1 billion revolving credit facility.
• Restructuring charges totaled $11 million for the quarter.

Guidance and Future Outlook

• Fiscal 2027 revenue is expected to decline at a mid-single-digit percentage rate.
• Fiscal 2027 gross margin is now expected to increase 170 to 220 basis points versus the prior year, revised down from a previous expectation of 220 to 270 basis points due to higher fuel/freight costs, inventory actions, and foreign exchange headwinds.
• Fiscal 2027 SG&A expense is expected to decrease at a high-single-digit rate; adjusted SG&A is expected to decrease at a low-single-digit rate.
• Fiscal 2027 operating income is now expected to be between $99 million and $119 million, revised up from a prior range of $96 million to $116 million.
• Fiscal 2027 adjusted operating income is expected to remain in the $140 million to $160 million range.
• Fiscal 2027 diluted earnings per share is now expected to range from a loss of $0.02 to earnings of $0.02, revised from a prior range of a loss of $0.01 to earnings of $0.05.
• Fiscal 2027 adjusted diluted earnings per share is expected to be $0.08 to $0.12.
• The outlook includes an approximate $70 million benefit from prior-year IEEPA tariff refunds, partially offset by $45 million in headwinds from the Middle East conflict.

Business Segments and Product Lines

• North America revenue declined 7% to $737 million; international revenue decreased 7% to $509 million (down 9% constant currency).
• International regional performance: EMEA decreased 9% (down 8% constant currency), Asia-Pacific decreased 9% (down 12% constant currency), and Latin America increased 3% (down 4% constant currency).
• Wholesale revenue decreased 6% to $725 million; Direct-to-consumer (DTC) revenue decreased 8% to $494 million.
• Within DTC, owned-and-operated store revenue declined 7%, and eCommerce revenue decreased 12%, representing 27% of total DTC revenue.
• Apparel revenue decreased 6% to $880 million; footwear revenue declined 11% to $234 million; accessories revenue decreased 7% to $105 million.
• Total company-owned and operated doors decreased to 438 at quarter-end from 447 in the prior year, with North America holding steady at 196 and International declining to 242 from 251.

Market and Competitive Landscape

• The company cites increased competition as a factor that may cause loss of market share, lower product prices, or increased marketing efforts.
• The business faces headwinds related to the ongoing conflict in the Middle East impacting supply chain costs.
• Foreign exchange fluctuations and unfavorable channel/regional mix contributed to margin compression.

Risks and Challenges

• The company faces external cost pressures including higher fuel and freight costs.
• Planned inventory management actions are expected to impact gross margin.
• Risks include changes in general economic conditions, inflation, trade policies, tariffs, and global events beyond control.
• The Fiscal 2025 Restructuring Plan has incurred $280 million in total costs to date, with total program costs anticipated to be approximately $305 million, expected to be substantially complete by December 31, 2026.

Management Commentary and Tone

• CEO Kevin Plank stated the company delivered against revenue expectations and exceeded operating income outlook.
• Management emphasized driving greater efficiency, sharpening product offerings, and amplifying global marketing to strengthen the brand.
• The tone reflects a focus on disciplined cost management and aligning operating expenses with the current demand environment.

Other Key Points

• The Fiscal 2025 Restructuring Plan recorded $11 million in charges and $2 million in transformation-related SG&A expenses during the quarter.
• Total restructuring and transformation costs under the Fiscal 2025 plan include $121 million in cash and $159 million in non-cash charges.
• Approximately 150 basis points of the expected gross margin improvement is attributed to the recovery of IEEPA-related tariff costs expensed in fiscal 2026.
• The company holds a $1.1 billion revolving credit facility with $190 million in borrowings outstanding.
• The conference call for this quarter was scheduled for November 6, 2026, at 8:30 a.m. Eastern Time.