Under Armour 2025 Q4 Earnings Misses Targets as Net Income Drops 1127%

Under Armour reported its fiscal 2025 Q4 earnings on May 13th, 2025. The company faced challenges in the fourth quarter, with revenue decreasing by 11.4% to $1.18 billion, narrowly missing analyst expectations. Despite efforts to reposition the brand, Under Armour posted a significant net loss, indicating financial pressures. Looking forward, guidance for Q1 fiscal 2026 remains cautious, with anticipated revenue decline and modest earnings expectations. These results highlight ongoing challenges and strategic adjustments needed to navigate a complex market environment.

Revenue
Under Armour's revenue for fiscal 2025 Q4 saw a decline of 11.4% compared to the previous year, totaling $1.18 billion. Apparel led the segment with $780.37 million, followed by footwear at $281.85 million. Accessories contributed $91.50 million, and net sales reached $1.15 billion. Licensing revenues were $24.22 million, while Corporate Other accounted for $2.65 million, culminating in total net revenues of $1.18 billion.

Earnings/Net Income
Under Armour faced a challenging fiscal 2025 Q4, swinging to a loss of $0.16 per share from a profit of $0.02 per share in 2024 Q4. The company reported a net loss of $-67.46 million, a stark contrast to the $6.57 million net income from the previous year. The EPS performance was unfavorable, indicating substantial financial strains.

Post-Earnings Price Action Review
The strategy of buying Under Armour shares when revenue beats expectations and holding for 30 days proved ineffective, resulting in a substantial loss of 42.29%. This performance significantly underperformed a benchmark return of 54.79%, yielding an excess return of -97.07%. The calculated compound annual growth rate was -11.11%, pointing to considerable losses over the backtested period. Additionally, the strategy experienced a high maximum drawdown of -80.97%, and the Sharpe ratio stood at -0.27, reflecting notable risk and negative returns. These metrics underscore the strategy's considerable volatility and lack of effectiveness in generating positive returns over the analyzed timeframe.

CEO Commentary
Kevin Plank, President and CEO of Under Armour, expressed confidence in the company’s agility and strategic choices aimed at elevating the brand despite facing top-line pressures. He highlighted the importance of regaining pricing power through a refined go-to-market process, ensuring comprehensive product innovation and improved sales execution. Plank emphasized the brand's identity as an authentic global sports house, focusing on high-return categories and simplifying operations. He acknowledged the challenges ahead but maintained an optimistic outlook, stating, "We know what it takes to win, and we're ready," underscoring a commitment to drive brand affection and long-term value creation.

Guidance
Under Armour anticipates a revenue decline of 4% to 5% in Q1 fiscal '26, with expectations of high single-digit growth in EMEA and a mid-teen percentage decline in APAC. Gross margin is projected to expand by 40 to 60 basis points. The company aims for adjusted operating income of $20 million to $30 million and adjusted diluted earnings per share of $0.01 to $0.03 for the first quarter, while continuing to focus on managing SG&A expenses amidst evolving trade policies.

Additional News
Under Armour has been actively repurchasing its Class C common stock, with $25 million repurchased in the fourth quarter, totaling 4.1 million shares retired. By March 31, 2025, the company had repurchased 12.8 million shares for $90 million under a three-year, $500 million program initiated in May 2024. Additionally, the company announced a restructuring plan in May 2024 to enhance financial and operational efficiencies, with anticipated charges ranging from $140 million to $160 million. This plan includes up to $90 million expected to be cash-related. As part of its strategic sponsorship efforts, Under Armour signed several 2025 NFL Draft Picks, including Cam Ward, the first overall pick, who is expected to become a notable figure in the league.