Under Armour Stock Tanks on Weak Q2 Results and Gloomy Q3 Guidance

Under Armour's Q2 revenue met expectations at $1.13 bln, but adjusted EPS of $0.02 missed consensus. The company issued a weaker-than-expected Q3 outlook, projecting $1.31 bln in revenue and $0.02 in adjusted EPS. Shares fell 22.4% in the morning session. The stock is down 36.1% YTD and trading 53.5% below its 52-week high.

Under Armour, Inc. (NYSE:UA) reported its first-quarter fiscal 2026 results, which fell short of analyst expectations. The athletic apparel maker’s shares plunged 13.6% following weak guidance that significantly missed Wall Street forecasts [1].

The company posted adjusted earnings per share (EPS) of $0.02, slightly below the analyst estimate of $0.03, while revenue declined 4% year-over-year (YoY) to $1.1 billion, missing the consensus estimate of $1.13 billion [1]. The disappointing performance was compounded by the company’s second-quarter outlook, which projects earnings of $0.01-$0.02 per share, dramatically below analyst expectations of $0.26 [1].

Under Armour’s North American revenue decreased 5% to $670 million, while international revenue declined 1% to $467 million. Footwear was particularly weak, with revenue dropping 14% to $266 million, while apparel revenue decreased 1% to $747 million. Accessories provided a bright spot, growing 8% to $100 million [1].

The company’s gross margin improved by 70 basis points to 48.2%, primarily due to favorable foreign exchange, pricing, and product mix. However, the company expects gross margin to decline 340 to 360 basis points in the second quarter, largely due to supply chain headwinds and anticipated impacts from tariffs [1].

Under Armour is currently implementing a restructuring plan announced in May 2024, aimed at improving financial and operational efficiencies. The plan is expected to cost between $140 million and $160 million, with $71 million in restructuring charges already recorded by the end of the first quarter [1].

For the second quarter, Under Armour expects revenue to decline 6-7%, with a low-double-digit percentage decrease in North America and a low-teens percent decline in the Asia-Pacific region, partially offset by high-single-digit growth in EMEA [1].

Shares of Under Armour tumbled in early Friday trading, with the stock sinking 15.8% in premarket trading. The stock is down 36.1% year-to-date (YTD) and trading 53.5% below its 52-week high [2].

References:
[1] https://www.investing.com/news/earnings/under-armour-shares-tumble-after-revenue-miss-weak-guidance-4179921
[2] https://www.marketwatch.com/story/under-armours-stock-dives-on-a-weak-outlook-with-tariffs-and-a-slowing-economy-to-blame-8552d1ff