Shares of Under Armour fell 17.2 percent on Tuesday as the company forecast profits in the current fiscal year will slide well below analyst targets, with the North America region expected to see its fifth consecutive year of declines.

The Baltimore-based firm provided guidance while reporting a small loss in the fiscal fourth quarter ended March 31 that was just below analyst targets.

Annual adjusted profit per share for the current fiscal year is projected to come in between 8 cents and 12 cents, compared with analysts’ average expectation of 23 cents. Revenue is expected to be “down slightly” year over year compared with analysts’ average expectation of a 1.6 percent rise. Low-single-digit growth in EMEA and Asia-Pacific is expected to be offset by a low-single-digit decrease in North America.

Under Armour said that excluding an approximately 1 point of impact from the exit of its Curry brand business, revenues are expected to be about flat.

A slide in sales in North America would follow declines of 8 percent in the region in the just-completed fiscal year, 11 percent in fiscal 2025, 8 percent in fiscal 2024, and 1 percent in fiscal 2023.

CEO and Founder Kevin Plank, who returned as CEO in 2024, said on quarter call with analysts that the company’s two-year restructuring plan continues to show progress. The plan includes reducing about 25 percent of the company’s product lines; shifting to higher-priced items in categories such as training, running and team sports; and overall emphasizing innovation and more full-price selling.

“(We are) bringing an even sharper focus on editing and optimizing our product assortment, marketing spend, processes, and cost structure to improve UA’s profitability,” said Plank.

The softer-than-expected outlook “reflects both continued consumer uncertainty and the deliberate choices we’re making to reshape the business,” added Plank. “We are prioritizing revenue quality over volume, strengthening the foundation and positioning the company to return to growth with stronger profitability and more consistent brand expression.”

Plank said its regions are in different stages of recovery.

“In North America, we expect stabilization in the year ahead and are focused on revenue quality, restoring marketplace discipline and rebuilding momentum with both consumers and wholesale partners. What we’re seeing gives us great confidence. Inventories cleaner, product feedback is positive and engagement with key accounts is strengthening,” Plank said.

He said Under Armour’s business in EMEA “remains solid and continues to serve as a stable anchor for the brand. In an uncertain environment, our priority there is protect and extend that strength by expanding in key markets while maintaining the discipline that’s made the region such a consistent contributor to our global performance.”

In APAC, he said Under Armour is “sharpening our focus and driving greater efficiency with a clear emphasis on China. We’re tightening the assortment, elevating the consumer experience and ensuring we are positioned to compete effectively in this critically important market.”

For fiscal year 2027, Under Armour expects annual adjusted operating income in the range of $140 million to $160 million, which includes about $70 million in benefits from potential tariff refunds, along with a roughly $35 million hit from the conflict in the Middle East plus $30 million in strategic marketing investments to strengthen its brand momentum as sales begin to stabilize. The adjusted operating income was $107 million in fiscal 2026.

Plank said Under Armour expects gross margins to expand approximately 220 to 270 basis points in fiscal 2027, primarily driven by the benefit of a tariff-related refund, along with pricing actions, better-managed promotions, and more favorable channel mix. The outlook further reflects “ongoing external pressures, including tariffs and broader geopolitical uncertainty.”

Shares closed down $1.05, or 17.2 percent, to $5.02.

Fourth-Quarter Revenues
In the fourth quarter, revenue decreased 1 percent to $1.2 billion, or down 4 percent constant currency (cc). Sales were in line with analysts’ expectations.

North America revenue declined 7 percent to $641 million, primarily due to a decrease in wholesale, with a slight decline in its direct-to-consumer business.

International revenue increased 10 percent to $539 million (up 3 percent cc). In EMEA, revenue increased 7 percent (down 1 percent cc), with about 3 points of negative impact on a reported basis coming from shipment timing that shifted from Q4 into Q1. EMEA’s results included growth across both wholesale and direct-to-consumer channels. APAC revenue increased 13 percent (up 8 percent cc), with growth in both DTC and wholesale channels. In Latin America, revenue increased 22 percent (up 8 percent cc) with strong double-digit growth across both wholesale and direct-to-consumer businesses.

From a channel perspective, wholesale revenue decreased 3 percent to $748 million, driven by a decrease in full-price sales, partially offset by distributor growth. Direct-to-consumer (DTC) revenue increased 5 percent to $406 million, with 8 percent growth in owned and operated stores and flat e-commerce revenue. E-commerce represented 35 percent of DTC sales in the period. Licensing revenue increased 11 percent to $27 million, driven by strength in the international business.

By category, apparel revenue was flat at $778 million with growth in train, outdoor and sportswear, offset by softness in run, team sports and golf. Footwear was flat at $282 million, with strength in run and team sports, offset by softness in other categories. Accessories grew 2 percent to $94 million, driven largely by strength in sportswear and train.

Fourth-Quarter Profitability
Gross margin declined 470 basis points to 42.0 percent. Excluding restructuring efforts, adjusted gross margin declined 360 basis points to 43.1 percent. The decline on an adjusted basis reflected 315 basis points of supply chain headwinds, including roughly 260 basis points of pressure from U.S. tariffs, 90 basis points from increased promotional pressure, particularly in direct-to-consumer channel that saw required inventory actions amid soft traffic. The margin decline also reflected 20 basis points of unfavorable regional mix. These headwinds were partially offset by 65 basis points of favorable foreign currency and channel mix impact.

SG&A expenses decreased 15 percent to $518 million, primarily reflecting lower marketing spend due to timing shifts, with most prior-year spending occurring in the second half, along with lower incentive compensation and overall expense management. Excluding $15 million in transformation expenses related to the Fiscal 2025 Restructuring Plan, adjusted SG&A declined 14 percent to $503 million. Restructuring charges totaled $8 million.

Operating loss was $34 million compared to an operating loss of $72 million a year ago. Excluding transformation and restructuring charges, adjusted operating income was $3 million in the latest quarter, compared to an adjusted operating loss of $36 million.

Net loss was $43 million, or 10 cents a share, against a net loss of $67 million, or 16 cents, a year ago.  Excluding transformation and restructuring charges, the adjusted net loss was $11 million, or 3 cents a share, against a loss of $35 million, or 8 cents, in the prior year.

Fiscal Year Highlights
For the fiscal year, revenue decreased 4 percent to $5.0 billion, or down 5 percent constant currency (cc). North America revenue decreased 8 percent while international revenue grew 4 percent. Wholesale revenue decreased 5 percent while DTC slipped 2 percent. Apparel sales decreased 2 percent, footwear slumped 11 percent and accessories inched up 1 percent.

Operating loss was $163 million against a year-ago operating loss of $185 million. The adjusted operating loss was $107 million compared with income of $198 million a year ago. The net loss was $496 million, or $1.16 a share, which included a $247 million valuation allowance on its U.S. federal deferred tax assets and compared with a net loss of $201 million in FY25. Adjusted net income was $50 million, down from adjusted net income of $135 million the prior year.

Fiscal 2025 Restructuring Plan
In the fourth quarter, the company recorded $8 million in restructuring charges, $13 million of restructuring in cost of goods sold, and $15 million in transformation-related SG&A expenses, for a total of $36 million under its Fiscal 2025 Restructuring Plan. To date, the company has incurred $261 million in total restructuring and transformation costs, slightly above its previous expectation of $255 million, including $109 million in cash and $152 million in non-cash charges. Following a comprehensive review, the company is initiating a targeted extension of the plan, bringing total program costs to approximately $305 million. The company expects the plan to be substantially complete by December 31, 2026.

First-Quarter Guidance
For the first quarter, Under Armour expects revenue to decline between 2 percent to 3 percent, driven by an anticipated high single-digit decline in North America reflecting a challenging retail environment , the ongoing reset and seasonal wholesale ordering. This will be partially offset by a low-teen percentage increase in EMEA, which includes a 3-point benefit from a shift in shipment timing from Q4 into Q1. APAC revenue is expected to be roughly flat. The first quarter is projected to represent the weakest revenue performance of the year, with growth rates improving progressively through the balance of fiscal ’27.

Gross margin for the first quarter is expected to increase by 610 to 630 basis points, largely due to the assumption of a benefit from IEEPA tariff refunds associated with the expenses that hit the P&L in fiscal ’26, which would contribute about 600 basis points. Excluding this benefit, favorable channel and product mix are expected to offset higher tariff rates currently in effect, supply chain headwinds related to the Middle East conflict and unfavorable FX and regional mix.

Adjusted SG&A expenses in the quarter are expected to increase at a high single-digit rate compared to last year’s adjusted SG&A, driven by higher marketing expenses, which are projected to result in first-quarter adjusted operating income of $30 million to $40 million and an adjusted EPS of breakeven to 2 cents. That compares with adjusted operating income of $24 million and adjusted EPS of 2 cents a year ago.

Plank concluded in his formal comments, “What you’re seeing taking shape is a more intentional and connected Under Armour with focused products, more aligned marketing and improved financial performance, which all reinforce one another. Over the past 2 years, we’ve rebuilt important parts of the company with greater clarity, discipline and accountability. Now following the progress we’ve made in reengineering our product organization, we are now applying that same focus and lens with rigor to marketing. With the goal of amplifying our product strengths, deepening consumer connection and driving more consistent demand. Most importantly, strategy is increasingly driving the decisions across the organization.

“We’re becoming more intentional about where we compete, how we invest and where we believe we can create the greatest long-term value. In fiscal ’27, we are operating from a position of greater strength. And while we remain a work in progress throughout this transformation, the model is simpler, the strategy is clear, execution is improving. We have a core team that is deeply committed to winning for this brand and our shareholders. We’ve made significant and important progress over the last 2 years, and I’m excited to see forward momentum translate into disciplined delivery and into building a more predictable and profitable business in the coming quarters and years.”