Under Armour, Inc. reported unaudited financial results for the fourth quarter and full-year fiscal 2026 ended March 31, 2026, with company Founder, President and CEO Kevin Plank suggesting that the company’s fiscal 2026 performance reflects the ongoing intentional steps the company is taking to reset the business and restore the discipline required to operate as a best-in-class brand.  Revenue was down for the quarter as the declines in the North America region more than offset International growth, but the number exceeded analysts’ estimates. The company posted an Adjusted loss per share of 3 cents for the fourth quarter, missing the analyst estimate for a loss of 2 cents per share.

UA shares were down in the low- to mid-teens in pre-market trading.

“Over the past two years, we’ve addressed structural and macro challenges head-on while elevating our product strategy. We’re streamlining our operating model and increasing accountability in execution, driving a more controlled and predictable business,” Plank commented. “As our topline stabilizes in fiscal 2027, we are applying the same rigor that is strengthening our product engine to our storytelling capabilities. Building world-class, modern marketing excellence is now our highest priority that we believe will accelerate consumer demand and help reshape Under Armour’s profit profile.”

Fourth Quarter Fiscal 2026 Review

Revenue decreased 1 percent to $1.2 billion, or down 4 percent constant currency (cc).

  • North America revenue declined 7 percent to $641 million, while International revenue increased 10 percent to $539 million (up 3 percent cc). Within International markets, EMEA revenue increased 7 percent (down 1 percent cc), Asia-Pacific increased 13 percent (up 8 percent cc), and Latin America increased 22 percent (up 8 percent cc).
  • Wholesale revenue decreased 3 percent to $748 million and direct-to-consumer (DTC) revenue increased 5 percent to $406 million. Within DTC, owned-and-operated store revenue grew 8 percent, and e-commerce revenue was flat, representing 35 percent of total DTC revenue for the quarter.
  • By category, Apparel revenue was flat at $778 million, Footwear was flat at $282 million, and Accessories grew 2 percent to $94 million.

Profitability

  • Gross margin declined 470 basis points to 42.0 percent of revenue, said to be primarily due to higher tariffs, as well as higher product costs, pricing headwinds, and unfavorable regional mix, partially offset by foreign exchange gains and favorable channel mix. Excluding restructuring impacts, Adjusted gross margin declined 360 basis points to 43.1 percent.
  • Selling, general and administrative (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. Excluding transformation and restructuring charges, adjusted operating income was $3 million.
  • Net loss was $43 million. Adjusted net loss was $11 million, which excludes transformation and restructuring charges.
  • Diluted loss per share was $0.10; adjusted diluted loss per share was 3 cents.

Inventory decreased 3 percent to $915 million at quarter-end.

Liquidity
Cash and cash equivalents totaled $309 million at quarter-end. The company also held $605 million in restricted investments designated for the repayment of its senior notes due in June 2026.

At quarter-end, $200 million of borrowings were outstanding under its $1.1 billion revolving credit facility.

Full Year Fiscal 2026 Review

Revenue decreased 4 percent to $5.0 billion, or down 5 percent constant currency (cc).

  • North America revenue decreased by 8 percent to $2.9 billion, while International revenue grew by 4 percent to $2.1 billion (flat cc). Within the International business, revenue increased 9 percent in EMEA (up 3 percent cc), declined by 5 percent in Asia-Pacific (down 6 percent cc), and increased 9 percent in Latin America (up 6 percent cc).
  • Wholesale revenue decreased 5 percent to $2.8 billion, and DTC revenue declined 2 percent to $2.1 billion. Revenue from owned and operated stores increased 1 percent, while eCommerce revenue decreased 7 percent, and accounted for 33 percent of the total DTC business for the year.
  • Apparel revenue decreased 2 percent to $3.4 billion; footwear revenue declined 11 percent to $1.1 billion, and accessories revenue increased 1 percent to $414 million.

Profitability

  • Gross margin decreased 240 basis points to 45.5 percent of revenue, said to be primarily due to higher tariffs, with smaller headwinds from pricing, higher product costs, and unfavorable channel and regional mix, partially offset by positive foreign currency impacts and favorable product mix. Excluding restructuring impacts, adjusted gross margin declined 220 basis points to 45.7 percent.
  • SG&A expenses declined 12 percent to $2.3 billion. Adjusted SG&A expenses decreased 5 percent to $2.2 billion, which excludes $99 million in litigation reserve expense and approximately $31 million in transformation costs related to our Fiscal 2025 Restructuring Plan. Restructuring charges were $128 million.
  • Operating loss was $163 million. Excluding the company’s litigation reserve expense, transformation expenses, and restructuring charges, adjusted operating income was $107 million.
  • Net loss was $496 million, which included a $247 million valuation allowance on its U.S. federal deferred tax assets. Adjusted net income was $50 million, which excludes the litigation reserve expense, transformation and restructuring charges, and the valuation allowance.
  • Diluted loss per share was $1.16. Adjusted diluted earnings per share was 12 cents for the 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.

Fiscal 2027 Outlook
Compared with fiscal 2026, key highlights of the company’s fiscal 2027 outlook include:

  • Revenue is expected to decline slightly year over year, with a low-single-digit decrease in North America partially offset by low-single-digit growth in EMEA and Asia-Pacific.
  • Gross Margin is expected to increase between 220 basis points and 270 basis points versus the fiscal 2026 gross margin. Approximately 150 basis points of this improvement is driven by an assumed reversal of International Emergency Economic Powers Act (“IEEPA”) tariff costs expensed in fiscal 2026. Excluding this benefit, gross margin improvement reflects pricing actions and a more favorable channel mix, partially offset by higher tariff rates currently in place, along with supply chain headwinds related to the Middle East conflict.
  • Including the additional transformation expenses related to the Fiscal 2025 Restructuring Plan, SG&A expenses are expected to decrease at a low single-digit rate. Excluding the transformation expenses, adjusted SG&A is expected to increase at a low single-digit rate. This increase reflects normalization of reduced prior year incentive compensation and benefit costs as part of the company’s tariff mitigation strategy, as well as incremental marketing investment to strengthen the brand as the business stabilizes, while maintaining disciplined cost control.
  • Operating income is expected to be in the range of $96 million to $116 million. Excluding expected transformation expenses and restructuring charges, adjusted operating income is anticipated to be $140 million to $160 million. This adjusted operating income includes an approximate $70 million benefit from the assumption that refunds from prior year IEEPA tariff expenses are realized, approximately $35 million of headwinds from the conflict in the Middle East, and approximately $30 million of incremental marketing investments.
  • Diluted loss per share is expected to range from breakeven to $0.04. Excluding anticipated transformation expenses and restructuring charges, adjusted diluted earnings per share is expected to range from $0.08 to $0.12, reflecting continued investment and external cost pressures, partially offset by the benefit of tariff-related refunds. This also incorporates an anticipated effective tax rate considerably higher than the prior year, due to unfavorable regional mix and profitability.

Image courtesy Under Armour