Under Armour, Inc.’s revenues declined 11 percent in the fourth quarter and 9 percent in the fiscal year ended March 31, but sales and adjusted earnings topped guidance. The company expects revenue in its first quarter to slide in the range of 4 percent to 5 percent.

The 9 percent decline in the year compared with guidance calling for a drop of 10 percent. Adjusted EPS in the year reached 31 cents a share, ahead of guidance between 28 cents and 30 cents a share.

“One year into our strategic reset, we’re laying the groundwork for a more focused Under Armour. By elevating products and storytelling, tightening distribution, and refining our operating model, we are in the process of reigniting brand relevance and positioning the business for sustainable, profitable growth,” said Under Armour President and CEO Kevin Plank. “Our fourth quarter performance contributed to fiscal 2025 results that were better than the expectations we set a year ago, and we are demonstrating traction in our efforts to reposition the brand.”

Fourth Quarter Fiscal 2025 Review

  • Revenue was down 11 percent to $1.2 billion (down 10 percent currency-neutral).
    • North American revenue decreased 11 percent to $689 million, while international revenue declined 13 percent to $489 million (down 10 percent currency-neutral). Within the International business, revenue declined 2 percent (flat currency neutral) in EMEA, 27 percent in Asia-Pacific (26 percent currency neutral), and 10 percent in Latin America (up 3 percent currency neutral).
    • Wholesale revenue decreased 10 percent to $768 million, and direct-to-consumer revenue fell 15 percent to $386 million. Revenue from owned and operated stores declined 6 percent, while eCommerce revenue dropped 27 percent due to ongoing planned reductions in promotional activities, accounting for 37 percent of the total direct-to-consumer business for the quarter.
    • Apparel revenue decreased 11 percent to $780 million, footwear revenue declined 17 percent to $282 million, and accessories revenue increased 2 percent to $92 million.
  • Gross margin increased 170 basis points to 46.7 percent, primarily driven by supply chain benefits, including lower product and freight costs, reduced direct-to-consumer discounting, and positive impacts from product mix and foreign exchange, partially offset by an unfavorable channel and regional mix.
  • Selling, general, and administrative expenses increased 1 percent to $607 million. Adjusted selling, general, and administrative expenses increased 7 percent to $586 million, which excludes approximately $16 million in transformation expenses related to our Fiscal 2025 Restructuring Program and roughly $5 million in litigation settlement expenses.
  • Restructuring charges were $16 million.
  • Operating loss was $72 million. Excluding the transformation expenses, restructuring charges, and litigation settlement expenses, the adjusted operating loss was $36 million. In the year-ago period, Under Armour posted an operating loss of $4 million on a reported basis and operating income of $54 million on an adjusted basis.
  • Net loss was $67 million. Adjusted net loss was $35 million. In the year-ago period, net income was $7 million on a reported basis and $49 million on an adjusted basis.
  • Diluted loss per share was 16 cents. Adjusted diluted loss per share was 8 cents. In the year-ago period, diluted EPS was positive 2 cents on a reported basis and 11 cents on an adjusted basis.
  • Inventory was down 1 percent to $946 million.
  • Cash and cash equivalents totaled $501 million, and there were no outstanding borrowings under the company’s $1.1 billion revolving credit facility.

Full Year Fiscal 2025 Review

  • Revenue decreased 9 percent to $5.2 billion (down 9 percent currency-neutral).
    • North American revenue decreased 11 percent to $3.1 billion, while international revenue fell 6 percent to $2.1 billion (down 5 percent currency-neutral). Within the International business, revenue was flat in EMEA (flat currency-neutral) and declined 13 percent in Asia-Pacific (down 13 percent currency-neutral) and 6 percent in Latin America (flat currency-neutral).
    • Wholesale revenue fell 8 percent to $3.0 billion, and direct-to-consumer revenue declined 11 percent to $2.1 billion. Revenue from owned and operated stores decreased 2 percent, while eCommerce revenue dropped 23 percent due to planned promotional activities reductions, accounting for 35 percent of the total direct-to-consumer business for the year.
    • Apparel revenue fell 9 percent to $3.5 billion, footwear revenue declined 13 percent to $1.2 billion, and accessories revenue rose 1 percent to $411 million.
  • Gross margin increased 180 basis points to 47.9 percent, primarily due to supply chain benefits, including reduced freight and product costs and decreased direct-to-consumer discounting. Unfavorable impacts from regional and channel mix fluctuations and foreign currency exchange variations partially offset this increase.
  • Selling, general, and administrative expenses increased 8 percent to $2.6 billion. Adjusted selling, general, and administrative expenses fell 2 percent to $2.3 billion, which excludes $266 million in litigation settlement expenses, approximately $31 million in transformation costs related to our Fiscal 2025 Restructuring Program, and an impairment of $28 million related to exiting our previous global headquarters.
  • Restructuring charges were $58 million.
  • Operating loss was $185 million. Excluding the company’s litigation settlement expenses, transformation expenses, restructuring charges, and impairment charges, adjusted operating income stood at $198 million.
  • Net loss was $201 million. Adjusted net income was $135 million.
  • Diluted loss per share was $0.47. Adjusted diluted earnings per share were $0.31.

Share Buyback Program
Under Armour repurchased $25 million of its Class C common stock in the fourth quarter, retiring 4.1 million shares. As of March 31, 2025, 12.8 million shares were repurchased for $90 million as part of a three-year, $500 million program approved by the Board of Directors in May 2024.

Fiscal 2025 Restructuring Plan
In May 2024, Under Armour announced a restructuring plan to improve the company’s financial and operational efficiencies. The plan has an anticipated range of $140 million to $160 million, with up to $90 million expected to be cash-related and as much as $70 million projected as non-cash charges. By the end of the fourth fiscal quarter of 2025, the company recognized $58 million in restructuring and impairment charges and $31 million in other related transformational expenses under the plan. Out of the total $89 million incurred, $55 million is cash-related, and $34 million is non-cash-related. The company anticipates realizing the remaining charges outlined in its updated restructuring plan during fiscal 2026.

First Quarter Fiscal 2026 Outlook
“As we look toward fiscal 2026 amid a complex macroeconomic backdrop, our sharpened execution, alignment, and focus — bolstered by the move to a category-led operating model — equip us to navigate ongoing volatility with resilience,” continued Plank. “I’m confident in the agility we’ve built over the past year, and we are raising our bar of excellence at Under Armour.”

Given the uncertainty surrounding evolving trade policies and the macroeconomic environment, including potential demand-related and cost impacts from tariffs, the company provided an outlook solely for the first quarter of fiscal 2026. Key points related to Under Armour’s first quarter fiscal 2026 outlook include:

  • Revenue is expected to decrease 4 to 5 percent compared to the first quarter of fiscal 2025, which includes an anticipated 4 to 5 percent decline in North America, high single-digit percentage growth in EMEA, and a mid-teen percent rate decline in the Asia-Pacific region.
  • Gross margin is expected to increase 40 to 60 basis points compared to the previous year, driven by a more favorable product mix, lower product and freight costs, and positive foreign exchange impacts. However, this increase is expected to be partially offset by a less favorable channel and regional mix and anticipated impacts from tariffs.
  • Selling, general, and administrative expenses are expected to decrease approximately 40 percent compared to last year’s first quarter, which included a $274 million litigation settlement expense. Excluding last year’s litigation settlement expense and anticipated transformation costs related to the company’s Fiscal 2025 Restructuring Plan, adjusted selling, general, and administrative expenses are expected to leverage slightly compared to the prior-year quarter.
  • Operating income is anticipated to be $5 million to $15 million. Excluding projected restructuring charges and transformation expenses, the expected first quarter adjusted operating income is forecasted to be between $20 million and $30 million.
  • Diluted loss per share is expected to be $0.00 to $0.02. Adjusted diluted earnings per share are anticipated to be $0.01 to $0.03.

Image courtesy Under Armour