Under Armour, Inc. (UAA Quick QuoteUAA - Free Report) has delivered an adjusted loss of 3 cents per share for the fourth quarter of fiscal 2026, which met the Zacks Consensus Estimate. The loss narrowed 62.5% from an adjusted loss of 8 cents in the prior-year period. Quarterly revenues were $1,171.2 million, edging down 0.8% year over year but beating the consensus estimate of $1,170 million. On a constant-currency basis, revenues decreased 4.2% year over year.

Under Armour highlighted continued progress in its transformation strategy in fourth-quarter fiscal 2026, with management focusing on improving operational efficiency, strengthening brand positioning and optimizing inventory levels. The company emphasized resilient international demand, particularly across the Asia-Pacific, Latin America and EMEA, which continued to support overall business momentum. 

Direct-to-consumer channels remained an important strategic focus as Under Armour works to deepen customer engagement and enhance profitability. Management also provided updates on its restructuring program, aimed at streamlining operations and creating a more agile business model. Looking ahead, the company expects continued investments in marketing, pricing actions and channel optimization to support long-term growth and margin expansion.

UAA’s International Momentum Supports Top Line

Regional performance remained split. North America revenues declined 7% to $640.9 million, continuing to weigh on the company’s overall trajectory.

However, international business remained strong, with revenues increasing 10.4% to $539 million (up 3% on a constant-currency basis), offering a meaningful offset. Within international markets, the Asia-Pacific revenues jumped 12.7%, Latin America increased 22.4% and EMEA revenues grew 7.1%, underscoring that demand outside North America remained comparatively resilient.

Under Armour’s DTC Gains Partly Offset Wholesale Softness

By distribution channel, wholesale revenues decreased 3% year over year to $748 million, missing the Zacks Consensus Estimate of $759 million, signaling continued caution in partner ordering and a tougher promotional backdrop in key markets.

Direct-to-consumer revenues increased 5% year over year to $406 million, surpassing the consensus estimate of $384 million. Owned-and-operated store revenues grew 8%, while e-commerce revenues were flat and represented 35% of the total DTC revenues for the quarter, pointing to steadier demand through the company’s own channels despite uneven wholesale trends.

UAA’s Category Results Show Stabilization in Core Lines

Across product categories, apparel revenues were flat year over year at $778 million, missing the Zacks Consensus Estimate of $785 million. Footwear revenues were also flat at $282 million, surpassing the consensus estimate of $261 million. Accessories grew 2.3% to $93.7 million, beating the consensus estimate of $93 million.

Under Armour’s Margin Pressure Highlights Tariff Headwinds

UAA’s gross profit declined 10.7% year over year to $492 million in fourth-quarter fiscal 2026. The gross margin contracted 470 basis points to 42% from 46.7% in the prior-year quarter. Excluding restructuring impacts, the adjusted gross margin declined 360 basis points to 43.1%.

The margin pressure was primarily driven by higher tariffs, elevated product costs, pricing headwinds and an unfavorable regional mix. Management also noted that these challenges were partially offset by favorable channel mix and foreign-exchange gains during the quarter.

Selling, general and administrative expenses declined 15% year over year to $517.7 million, reflecting lower marketing spend due to timing shifts, reduced incentive compensation and disciplined expense management. Excluding transformation-related expenses tied to the fiscal 2025 Restructuring Plan, adjusted SG&A decreased 14% to $502.6 million. 

Under Armour reported an operating loss of $33.7 million for the quarter. However, excluding restructuring and transformation-related charges, adjusted operating income came in at $2.7 million against an adjusted operating loss of $35.6 million in the year-ago quarter.

Under Armour’s Financial Snapshot

At the end of fourth-quarter fiscal 2026, Under Armour held $309 million in cash and cash equivalents. The company also maintained $605 million in restricted investments allocated toward the repayment of senior notes maturing in June 2026. At the quarter-end, outstanding borrowings under its $1.1-billion revolving credit facility stood at $200 million. Inventory levels decreased 3% year over year to $914.8 million, highlighting ongoing inventory optimization efforts.

UAA’s Restructuring Plan Details

Under Armour also provided an update on its fiscal 2025 Restructuring Plan, which is aimed at improving operational efficiency and streamlining the business. During the fourth quarter, the company recorded $8 million in restructuring charges, $13 million in restructuring-related costs within cost of goods sold and $15 million in transformation-related SG&A expenses, bringing total restructuring and transformation costs incurred to date to approximately $261 million.

Management noted that the total restructuring program costs are expected to reach $305 million, slightly above the prior mentioned $255 million. The revised estimate includes around $109 million in cash charges and roughly $152 million in non-cash charges incurred to date. The company expects the restructuring plan to be substantially complete by Dec. 31, 2026.

Under Armour Provides FY27 Outlook

For fiscal 2027, Under Armour expects revenues to decline slightly year over year. Management projects a low-single-digit decline in North America revenues, partially offset by low-single-digit growth in the EMEA and the Asia-Pacific regions.

The company anticipates gross margin expansion of 220-270 basis points compared with fiscal 2026 levels. Approximately 150 basis points of the expected improvement is tied to the assumed reversal of International Emergency Economic Powers Act (“IEEPA”) tariff costs recorded in fiscal 2026. Excluding this benefit, management expects margin improvement to be supported by pricing actions and a more favorable channel mix, partly offset by higher tariff rates currently in place and supply-chain headwinds related to the Middle East conflict.

Selling, general and administrative expenses are projected to decline at a low-single-digit rate, including additional transformation expenses associated with the fiscal 2025 Restructuring Plan. Adjusted SG&A is expected to rise at a low-single-digit rate due to normalized incentive compensation, benefit costs, incremental marketing investments and continued tariff mitigation efforts.

Under Armour expects fiscal 2027 operating income between $96 million and $116 million. Adjusted operating income is projected to be $140 million to $160 million, including a $70-million benefit from expected tariff-related refunds, $35 million of headwinds tied to the Middle East conflict and $30 million in incremental marketing investments.

The bottom line is expected to range from breakeven to a loss of 4 cents for fiscal 2027. Adjusted earnings per share are projected between 8 cents and 12 cents, reflecting continued investments and external cost pressures, partly offset by tariff-related benefits. 

UAA Stock Past 3-Month Performance

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This Zacks Rank #3 (Hold) stock has lost 15.7% in the past three months compared with the industry’s decline of 11.4%.

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