#United States #Baltimore #Under Armour #Kevin Plank #Fiscal 2026

Under Armour's Financial Performance Update for Q3 Fiscal 2026

In a recent announcement, Under Armour, Inc. (NYSE: UAA, UA) disclosed its financial results for the third quarter of fiscal 2026, ending December 31, 2025. The report highlighted several critical developments and challenges faced by the company.

Key Financial Figures

For Q3, Under Armour reported a revenue drop of 5% to $1.33 billion compared to the previous year. This decline is even more pronounced on a currency-neutral basis, where revenues fell 6%. The breakdown reveals North America revenue decreasing by 10% to $757 million, while international revenues saw a slight increment of 3% to $577 million. Particularly noteworthy is Latin America's 20% revenue climb, which contrasts with the 5% decline observed in the Asia-Pacific region.

CEO Kevin Plank commented on the earnings report, stating, "Our third quarter adjusted operating results exceeded expectations. Despite a few unfortunate, non-recurring impacts, we're encouraged by the progress we're making in the business to reignite brand momentum." Plank further noted that the December quarter was a low point in their business reset, and the focus moving forward is on solidifying a more stable base globally.

Despite the observed revenue decline, Plank expressed optimism about the transformation underway at Under Armour. He emphasized a strategy centered on enhanced products, more impactful storytelling, and a disciplined market presence.

Performance by Segment

In terms of distribution channels, Under Armour saw a 6% reduction in wholesale revenue, falling to $660 million. The direct-to-consumer segment also experienced a 4% decline, ultimately generating $647 million. The company's eCommerce division faced a 7% decrease. Additionally, the apparel category's revenue decreased by 3% to $934 million, while footwear took a harder hit with a 12% decline to $265 million.

Notably, gross margins fell 310 basis points to 44.4%, exacerbated by higher tariffs and various pricing challenges.

Operating Loss and Financial Outlook

Under Armour reported an operating loss of $150 million for Q3. Adjusted figures, excluding litigation and restructuring charges, revealed a positive adjusted operating income of $26 million. However, the net loss reached $431 million, largely attributed to a $247 million valuation allowance on its U.S. deferred tax assets. The optimistic twist here is that adjusted net income, after accounting for various expenses, stood at $37 million.

Looking ahead, Under Armour has revised its fiscal 2026 outlook. Revenue is anticipated to decline roughly 4%, a slight improvement from prior forecasts. North America is expected to reflect an 8% drop, while EMEA territory could see a 9% increase. The company also expects gross margins to decrease by about 190 basis points and anticipates a diluted loss per share between $1.24 and $1.25.

Strategic Transformation Efforts

Notably, the restructuring plan initiated in May 2024 is set to result in expenses up to $255 million. This restructuring is aimed at streamlining operations and enhancing financial efficiency. As Plank remarked, the upcoming quarters hold the potential for improved stability as the company builds on the progress made thus far.

In conclusion, while Under Armour faces significant headwinds, the leadership remains focused on navigating through this difficult phase, implementing strategic changes to rejuvenate the brand's presence in the competitive landscape. Today, Under Armour will conduct a conference call to discuss these results further, marking a pivotal moment for the company's financial and operational strategy.