What drove UA's earnings surprise in Q1 2025?

Under Armour's (UA) earnings surprise in Q1 2025 was driven by a combination of factors that contributed to improved gross margins and strategic product initiatives:

1. **Gross Margin Improvement**: Gross margin increased by 240 basis points to 47.5%, primarily due to supply chain benefits, reduced discounting, and favorable foreign currency impacts. This improvement in gross margin reflects enhanced operational efficiency and cost management, which has positively impacted the company's profitability.
2. **Strategic Product Launches**: The launch of new product lines, such as the Curry Brand's Fox 1 signature shoe and upcoming SlipSpeed Echo footwear, is expected to drive future growth. These strategic product initiatives not only generate buzz around the brand but also contribute to revenue growth in the coming quarters.
3. **Marketplace Discipline**: Under Armour's shift to a category-led operating model has enhanced accountability and streamlined execution across key sports categories. This focus on specific sports categories allows the company to better understand and meet athletes' needs, leading to improved product alignment and marketing efforts.
4. **Brand Restructuring**: The company's restructuring efforts, which include recognizing charges for restructuring and impairment, are part of a broader plan to transform the business. While these charges may impact short-term earnings, they are indicative of a long-term strategy to improve the company's financial and operational efficiency.

In conclusion, Under Armour's earnings surprise in Q1 2025 was primarily driven by improved gross margins, strategic product launches, marketplace discipline, and brand restructuring. These factors collectively contributed to the company's financial performance and outlook for the fiscal year 2025.