Under Armour Q1 FY26 Revenue Down 4% to $1.1B, Gross Margin Up 70 Basis Points to 48.2%

Under Armour reported a 4% decline in revenue to $1.1 billion in Q1 of FY26, with a net loss of $3 million. The gross margin increased by 70 basis points to 48.2%. International revenue in EMEA increased by 10%, and accessories revenue grew by 8%. However, North American revenue decreased by 5%, footwear revenue fell by 14%, and eCommerce revenue dropped by 12%. The company is focusing on premium products and strategic pricing to drive future growth.

Under Armour (NYSE: UA), the athletic apparel and footwear maker, released its first quarter fiscal 2026 earnings on August 8, 2025. The company reported a 4.2% decline in revenue to $1.1 billion, missing analyst expectations of $1.155 billion. Despite the revenue drop, the company achieved a net loss of $2.6 million, a significant improvement from last year's loss of $305 million [1].

Key highlights of the quarter include a 0.7 percentage point improvement in gross margin to 48.2%, driven by favorable foreign currency swings, price gains, and a stronger product mix. Adjusted operating income jumped to $24 million, up from $8 million in the prior year [1].

International revenue in EMEA increased by 10%, while accessories revenue grew by 8%. However, North American revenue decreased by 5%, footwear revenue fell by 14%, and eCommerce revenue dropped by 12%. The company attributed these declines to strategic choices, such as reducing promotional activity and shifting toward full-price sales in the direct-to-consumer (DTC) channel [1].

Under Armour continues to focus on premium products and strategic pricing to drive future growth. The company aims to boost long-term margin and brand positioning by telling compelling product and athlete stories and expanding DTC and e-commerce channels. However, the company faces ongoing supply chain and tariff risks, particularly with a significant portion of its production volume sourced from Asia [1].

For the second quarter of FY2026, management forecasts revenue (GAAP) to decline by 6-7%, with weakness led by North America and Asia-Pacific. Gross margin (GAAP) is projected to drop by 3.4-3.6 percentage points due to expected tariff impacts and channel mix shifts. Adjusted operating income is guided for $30-$40 million, and adjusted diluted EPS in the range of $0.01-$0.02 [1].

Investors should closely monitor inventory trends and the impact of premiumization, supply chain actions, and new product launches on Under Armour's performance. The company does not currently pay a dividend.

References:
[1] https://www.theglobeandmail.com/investing/markets/stocks/UAA-N/pressreleases/34000357/under-armour-ua-q1-revenue-falls-4-2/
[2] https://www.nasdaq.com/articles/under-armour-ua-q1-revenue-falls-42