Key Takeaways
- Shares of UAA plunged approximately 12-13% in premarket hours following fourth-quarter results that disappointed investors
- The company posted an adjusted quarterly loss of $0.03 per share, worse than the anticipated $0.02 loss
- Quarterly revenue declined 1% from the prior year to $1.2 billion; domestic sales in North America contracted 7%
- Profitability margins compressed due to tariff impacts, elevated product costs, and challenging pricing dynamics
- Fiscal 2027 earnings outlook of $0.08–$0.12 per share significantly trailed Street estimates of $0.23
Under Armour delivered fourth-quarter financial results that fell short of Wall Street’s expectations on Tuesday, triggering a sharp 13% decline in premarket activity to roughly $5.21 per share.
The athletic wear manufacturer recorded an adjusted quarterly loss of $0.03 per share, falling short of analyst projections for a $0.02 loss. While the variance appears modest, investors reacted swiftly and negatively.
Quarterly sales totaled $1.2 billion, representing a 1% decline compared to the same period last year. This figure marginally exceeded Wall Street’s projection of $1.17 billion, though it failed to compensate for the earnings shortfall and conservative forward guidance.
The domestic market remains problematic for the brand. North American sales contracted 7% to $641 million for the quarter. Meanwhile, international markets demonstrated resilience with 10% growth to $539 million, though this couldn’t fully offset domestic weakness.
Wholesale channel revenue also weakened, declining 3% to $747.7 million.
Profitability Challenges Mount
Gross margin deterioration emerged as a significant concern. On a reported basis, it contracted 470 basis points to 42%. The adjusted figure showed a 360-basis-point decline to 43.1%.
The company attributed this compression to multiple factors: escalating tariff costs, rising product expenses, pricing pressures, and unfavorable geographic sales mix. These combined pressures created substantial margin headwinds.
For the complete fiscal year 2026, Under Armour generated $5.0 billion in revenue, down 4% year-over-year. The company delivered adjusted earnings of $0.12 per share for the full year.
Additionally, the athletic apparel company recorded a net loss totaling $496 million for fiscal 2026, incorporating a $247 million valuation allowance related to U.S. federal deferred tax assets.
Chief Executive Kevin Plank characterized the results as reflecting a strategic realignment. “Our fiscal 2026 performance reflects the ongoing intentional steps we’re taking to reset the business and restore the discipline required to operate as a best-in-class brand,” he stated.
Forward Projections Disappoint Investors
The forward-looking guidance proved most troubling for the market. Under Armour projected fiscal 2027 adjusted earnings per share between $0.08 and $0.12. The $0.10 midpoint represents a substantial shortfall versus the $0.23 analyst consensus.
The company anticipates revenue will experience another modest year-over-year decline in fiscal 2027.
Operating income projections range from $96 million to $116 million. This forecast incorporates a $70 million positive impact from anticipated tariff refunds, though this benefit is partially offset by $35 million in headwinds stemming from Middle East regional conflicts and an additional $30 million allocated toward expanded marketing initiatives.
These marketing investments represent Plank’s strategic effort to enhance brand narrative and positioning. The ultimate effectiveness of this strategy remains uncertain.
The company’s fiscal 2027 projections underscore a business navigating through a transformation period, balancing external cost challenges while attempting to reinvigorate brand strength.
UAA traded around $5.21 in premarket activity Tuesday, representing a decline from Monday’s closing price of $6.06.
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