Under Armour's Q1 2026: Navigating Contradictions in Tariffs, E-Commerce Strategy, and Youth Engagement

Tariff impact on demand and strategy, e-commerce strategy and performance, North America revenue performance, and marketing strategies and reaching younger consumers are the key contradictions discussed in Under Armour's latest 2026Q1 earnings call.



Revenue Decline and Regional Performance:
- Under Armour reported a 4% decline in revenue for Q1 fiscal 2026, with regional results showing North America with a 5% decline, EMEA increasing 10%, and APAC and Latin America declining by 10% and 15%, respectively.
- The decline in North America was due to a decrease in full-price wholesale business and lower e-commerce sales, while growth in EMEA was driven by steady growth across all channels, particularly in full-price wholesale.

Product and Pricing Strategy:
- Apparel revenue declined by 1%, with softness in categories like run and golf, while footwear revenue fell by 14%.
- This was due to challenges in demand and deliberate efforts to optimize the business by simplifying the product engine and focusing on key items to improve pricing and margin.

Gross Margin and Tariff Impacts:
- Under Armour's gross margin increased by 70 basis points year-over-year to 48.2%, with favorable foreign currency impacts contributing 55 basis points.
- However, the company is facing a $100 million increase in tariff-related costs, impacting 200 basis points of negative gross margin, expected to continue in subsequent quarters.

Digital and Brand Engagement:
- Direct-to-consumer revenue declined by 3%, with a 12% decline in e-commerce, but the company's e-commerce Net Promoter Score increased by 18 points to nearly 70.
- This was due to a highly competitive digital environment and efforts to improve the customer experience through better storytelling and increased engagement.