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.

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.

First Quarter Fiscal 2026 Outlook
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