Under Armour's Q1 Earnings Miss Expectations, Forecasts 50% Drop in Full-Year Profits

Under Armour's stock plummeted 20% after the company reported a $2.6 million loss for Q1, missing expectations. CFO David Bergman warned that profits for the full year could be half of last year's due to tariffs and soft demand for shoes, which may prolong the company's turnaround. Under Armour previously projected a modest revenue dip for FY26, but the company is now exploring alternative suppliers and considering price hikes.

Under Armour (UAA) reported a $2.6 million loss for the first quarter of 2025, falling short of analyst expectations. The company's earnings per share (EPS) of $0.02 missed the Zacks Consensus Estimate of $0.03 per share, representing a 33.33% negative surprise [1]. This marks a significant downturn from the previous year's EPS of $0.01 per share. The stock price plummeted by 17.46% in pre-market trading following the announcement, dropping from $6.27 to $5.11 [2].

Revenue for the quarter totaled $1.1 billion, a 4% decline from the year-ago period. North America revenue fell by 5%, while EMEA revenue grew by 10%. However, the Asia-Pacific region saw a 10% decrease in revenue [2]. The company's gross margin improved by 70 basis points to 48.2%, but overall financial health remains rated as FAIR by InvestingPro [2].

Under Armour's CFO, David Bergman, warned that profits for the full year could be halved compared to last year due to ongoing tariff pressures and soft demand for shoes. The company is now exploring alternative suppliers and considering price hikes to manage these challenges [2]. Kevin Plank, the company's CEO, emphasized a strategic shift towards premium, performance-driven products and rebuilding brand perception [2].

The company projects a 6-7% revenue decline for the fiscal year 2026, with North America expected to see a low double-digit decline. Gross margin is expected to decline by 340-360 basis points, and operating income is projected to be about half of FY2025 levels [2].

Under Armour's stock has underperformed the market this year, losing about 19.8% since the beginning of the year compared to the S&P 500's gain of 7.8%. The company's Zacks Rank #4 (Sell) indicates that the shares are expected to underperform the market in the near future [1].

References:
[1] https://finance.yahoo.com/news/under-armour-uaa-misses-q1-120501411.html
[2] https://www.investing.com/news/transcripts/earnings-call-transcript-under-armour-q1-2025-misses-eps-forecast-stock-drops-93CH-4181091