Under Armour Plunges 18.74%—What’s Fueling the Retailer’s Descent?

Summary
• Under Armour C (UA) tumbles 18.74% intraday, hitting a 52-week low of $4.88
• Q1 loss of $2.6M and 50% profit cut for FY2026 trigger investor panic
• CEO Kevin Plank’s brand-centric strategy clashes with near-term revenue declines

Under Armour’s stock has imploded amid a perfect storm of earnings misses, tariff headwinds, and a brand revival plan that’s yet to translate into financial stability. With a 5.36/4.88 intraday range and a -10.79 P/E ratio, the selloff reflects deepening concerns over the retailer’s ability to navigate a $1.1B revenue quarter while slashing costs. The apparel sector’s mixed performance adds urgency to the sell-off, as investors weigh Plank’s long-term vision against immediate cash flow risks.

Earnings Shock and Tariff Woes Trigger Flight to Safety
Under Armour’s 18.74% collapse stems from a Q1 loss of $2.6M—far below the $600K profit forecast—and a 50% profit cut for FY2026. CEO Kevin Plank’s admission that tariffs and weak demand will delay turnaround efforts has shattered short-term confidence. The company’s $1.1B revenue (down 4.2% YoY) and $0.02 adjusted EPS (missing estimates) underscore operational struggles. With footwear sales down 14% and e-commerce revenue falling 12%, investors are fleeing a brand that’s yet to prove its premium pricing strategy can offset margin pressures.

Apparel Sector Mixed as Nike Trails Under Armour’s Slide
Bearish Playbook: Leveraged Puts and Short-Term Calls
• MACD: -0.0427 (bearish divergence), RSI: 45.03 (oversold), Bollinger Bands: $6.94 (upper), $6.51 (mid), $6.07 (lower)
• 200-day MA: $6.89 (price below), 30-day MA: $6.55 (bearish crossover)

Under Armour’s technicals scream short-term bearishness, with a bearish engulfing pattern and oversold RSI. Key support at $6.58 (30D MA) and resistance at $6.39 (200D MA) frame a tight range. The stock’s -18.74% move has created high-conviction options plays:

Top Option 1: UA20250815C5
• Call, $5 strike, expires 8/15
• IV: 44.73% (moderate), Leverage: 20.74%, Delta: 0.724, Theta: -0.0257, Gamma: 0.9729, Turnover: $13,464
• High gamma and delta suggest strong price sensitivity; leverage ratio amplifies gains in a rebound
• Payoff: 5% downside to $4.84 → max loss of $0.16 (strike - price). 5% upside to $5.35 → $0.35 profit
• Ideal for aggressive bulls betting on a post-earnings bounce

Top Option 2: UA20250919C5
• Call, $5 strike, expires 9/19
• IV: 48.17% (moderate), Leverage: 11.52%, Delta: 0.630, Theta: -0.0065, Gamma: 0.440, Turnover: $21,683
• High liquidity and moderate IV make this a safer play; gamma and delta balance risk/reward
• Payoff: 5% downside to $4.84 → max loss of $0.16. 5% upside to $5.35 → $0.35 profit
• Suitable for traders expecting a gradual recovery post-earnings

Action: Aggressive bulls may consider UA20250815C5 into a bounce above $5.35. Cautious investors should short the stock below $5.12 (open price) with a stop at $5.36 (intraday high).

Backtest Under Armour C Stock Performance
The backtest of UA's performance after a -19% intraday plunge shows mixed results. While the stock recovered, the returns over various time frames were modest, with the maximum return being 1.67% over 30 days. This suggests that while the stock managed to recover, it did not lead to significant gains in the short term.

Urgent: Watch for $5.12 Breakdown or Brand Revival Signal
Under Armour’s selloff is unsustainable unless Plank’s brand-driven strategy generates near-term revenue traction. The stock’s -18.74% move has created a critical juncture: a break below $5.12 (open price) could trigger further panic, while a rebound above $5.36 (intraday high) may signal short-covering. Investors should monitor the 30D MA at $6.58 and 200D MA at $6.39 for directional clues. Meanwhile, sector leader Nike (NKE) is down -0.44%—a bearish omen for apparel stocks. Act now: Short UA below $5.12 or buy UA20250815C5 for a bullish rebound.