Weak Guidance And Tariff Worries Send Under Armour Stock Tumbling

Under Armour, Inc. UAA stock sank Friday after the company reported first-quarter fiscal 2026 results that met or exceeded internal expectations but missed Wall Street estimates.

Revenue declined 4% year over year to $1.13 billion, falling short of the $1.154 billion consensus estimate. The company reported a GAAP net loss of $3 million, or 1 cent per diluted share, and adjusted net income of $9 million, or 2 cents per share, up from 1 cent a year ago.

North America revenue fell 5% to $670 million, while international revenue dipped 1% to $467 million. Within international markets, EMEA revenue rose 10% to $249 million, while Asia-Pacific and Latin America declined 10% and 15%, respectively.

Also Read: Uncovering Potential: Under Armour’s Earnings Preview

Wholesale revenue declined 5% to $649 million, and direct-to-consumer revenue fell 3% to $463 million. eCommerce revenue dropped 12%, representing 31% of the direct-to-consumer business. Revenue from owned and operated stores rose 1%.

By category, apparel revenue slipped 1% to $747 million, footwear dropped 14% to $266 million, and accessories rose 8% to $100 million. Gross margin improved 70 basis points to 48.2%, supported by favorable foreign exchange, pricing, and product mix, partially offset by higher supply chain costs and an unfavorable channel mix.

Operating income was $3 million. Excluding $13 million in restructuring charges and $8 million in transformation expenses related to the fiscal 2025 Restructuring Plan, adjusted operating income came in at $24 million.

Selling, general, and administrative expenses declined 37% to $530 million. On an adjusted basis, SG&A fell 6% to $522 million. Inventory increased 2% year over year to $1.1 billion.

The company ended the quarter with $911 million in cash and cash equivalents, boosted by a $400 million senior notes issuance. There were no borrowings under its $1.1 billion revolving credit facility. Operating cash flow totaled $49 million, while capital expenditures reached $35 million.

To date, Under Armour has incurred $110 million of the $140 million to $160 million in total charges expected under its ongoing restructuring plan. Of that amount, $65 million is cash-related and $45 million is non-cash.

“Despite ongoing uncertainty, our brand is gaining strength and we’re executing our strategic plan with clarity and confidence,” said President and CEO Kevin Plank.

Outlook

For the second quarter of fiscal 2026, Under Armour expects revenue between $1.055 billion and $1.066 billion, well below the $1.374 billion analyst estimate.

Adjusted diluted earnings per share are projected to range from 1 to 2 cents, compared to the 28 cents consensus.

The outlook calls for a low double-digit revenue decline in North America, high single-digit growth in EMEA, and a low-teens decline in Asia-Pacific.

Gross margin is expected to decline by 340 to 360 basis points, primarily due to anticipated tariff impacts and an unfavorable channel mix.

SG&A expenses are forecast to rise in the low double digits, driven by increased marketing investments.

Price Action: At last check Friday, UAA shares were trading lower by 20.5% to $5.280 premarket.

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