Under Armour Plunges 20.3%: Can the Brand’s Swagger Salvage Shareholder Value?

Summary
• Under Armour C (UA) tumbles 20.3% to $4.995, its lowest since 2020
• CEO Kevin Plank’s ‘brand-first’ pivot clashes with Q1 revenue decline and tariff-driven profit cuts
• 52-week low at $4.6201 looms as $5 call options see 84% price drop

Under Armour’s shares imploded on August 8, 2025, as Q1 earnings revealed a 4% revenue drop and a 50% profit cut. CEO Kevin Plank’s return to the helm in 2024 has sparked a brand-centric strategy, but tariffs and operational headwinds are testing investor patience. The stock’s intraday range of $4.88–$5.36 underscores volatile sentiment, with options chains reflecting extreme bearish positioning.

Q1 Revenue Miss and Tariff Woes Spark Investor Exodus
Under Armour’s 20.3% intraday plunge stems from a Q1 revenue decline of 4% to $1.1 billion and a 50% reduction in FY2026 profit guidance. CEO Kevin Plank’s emphasis on brand identity—over short-term financials—failed to offset concerns about tariffs, declining footwear sales (-14%), and a 4% drop in direct-to-consumer revenue. The stock’s collapse aligns with a bearish engulfing candlestick pattern, signaling a breakdown in long-term support near $5.20.

Apparel Sector Mixed as Nike Trails Under Armour’s Slide
The Apparel, Accessories, and Luxury Goods sector saw mixed performance, with Nike (NKE) down 0.78% as of 17:46 ET. Under Armour’s 20.3% drop far outpaces sector peers, reflecting its unique challenges: a 14% footwear revenue decline and $13 million in restructuring charges. While luxury brands like Prada and Burberry reported modest gains, Under Armour’s brand-revival strategy remains unproven against macroeconomic headwinds.

Bearish Playbook: Call Options and Puts for a Volatile Rebound
• MACD: -0.0427 (bearish divergence), RSI: 45.03 (oversold), Bollinger Bands: Price at $4.995 (below 200D MA at $6.89)
• Kline Pattern: Short-term bearish trend + bearish engulfing, Long-term: Ranging
• Support/Resistance: 30D: $6.59–$6.60, 200D: $6.29–$6.40

Top Options:
• UA20250815C5 (Call): Strike $5, Expiry 8/15, IV 64.30%, Leverage 25.07%, Delta 0.535, Theta -0.025, Gamma 0.832, Turnover $9,925. High gamma and leverage make this ideal for a short-term rebound.
• UA20250919P5 (Put): Strike $5, Expiry 9/19, IV 49.70%, Leverage 15.67%, Delta -0.447, Theta -0.001, Gamma 0.462, Turnover $18,650. Strong IV and liquidity position this for a bearish hold.

Payoff Analysis: A 5% downside to $4.75 would yield $0.25 profit for the put, while the call could see 25% gains if UA rebounds to $5.50. Aggressive bulls may consider UA20250815C5 into a bounce above $5.20, while bears should watch UA20250919P5 for a hold below $5.00.

Backtest Under Armour C Stock Performance
The backtest of UA's performance after a -20% intraday plunge shows mixed results. While the stock recovered positively in the short term, the overall returns were modest, with a 30-day return of 0.67% and a maximum return of 1.20% over 40 days. This suggests that while UA had a strong bounce from the plunge, it did not lead to significant long-term gains.

Brand Revival or Tariff Trap? Watch $5.00 Support
Under Armour’s 20.3% drop reflects a critical juncture: CEO Kevin Plank’s brand-first strategy must overcome tariffs and declining footwear sales. Technicals suggest a test of $4.62 (52W low) if $5.00 support breaks. Sector leader Nike (NKE) down 0.78% highlights broader apparel sector fragility. Investors should monitor the UA20250919P5 put for a bearish hold and watch for a rebound above $5.20 to validate Plank’s brand-centric pivot. Action: Short-term traders target $4.75–$4.85 for puts; longs consider $5.00–$5.20 for calls.