Group 1 - Alibaba Group CEO Wu Yongming stated that achieving "Super Artificial Intelligence" will take a long time, emphasizing the company's commitment to developing a comprehensive AI cloud to promote open-source technology and accessibility [2] - Under Armour appointed Carol Chen as Vice President and General Manager for China, effective November 9, to oversee market strategy and operations [3] - The China Consumers Association reported receiving 536,761 consumer complaints in Q3 2025, a 7.9% year-on-year increase, recovering economic losses of 236 million yuan [4][11] Group 2 - Hong Kong Stock Exchange reported a total market capitalization of 48.1 trillion HKD at the end of October 2025, a 37% year-on-year increase, with average daily trading volume rising by 8% [6] - JD.com's founder Liu Qiangdong discussed the company's collaboration with robot companies to enhance last-mile delivery using community robots [7] - The Ministry of Industry and Information Technology highlighted the solid foundation and continuous improvement of China's AI industry during the 8th China International Import Expo [8] Group 3 - The "Silk Road E-commerce" cooperation zone celebrated its two-year achievements, launching the 2025 National "Silk Road Cloud Products" E-commerce Month [9] - Dawn Group announced its involvement in developing modified materials for robotics, including nylon and alloy materials for robotic arms and thermoplastic elastomers for simulated skin [10] - The U.S. saw over 153,000 layoffs in October 2025, the highest in over 20 years, attributed to the rise of AI technology and economic factors [12]

Core Insights - Under Armour Inc reported fiscal second-quarter results that exceeded expectations, with adjusted earnings of four cents per share, surpassing the Street's forecast of two cents per share [2] - Despite a contraction in gross margins by 250 basis points to 47.3%, this figure was better than the consensus estimate of 46.3% [2] - The company anticipates a revenue decline of 4%-5% in fiscal 2026, particularly in North America and APAC, with a high single-digit decline expected in those regions [3] Financial Performance - The fiscal second-quarter results were slightly above expectations, attributed to a timing shift of 100 basis points of sales from the third quarter and benefits from foreign exchange and pricing actions [4] - The guidance for the fiscal third quarter fell short of expectations due to soft demand and the full quarter impact of tariffs, indicating ongoing challenges [5] Analyst Ratings - JPMorgan analyst Matthew Boss reiterated an Underweight rating with a price target of $5, while Telsey Advisory Group analyst Cristina Fernández maintained a Market Perform rating with the same price target [6]

Core Insights - Under Armour announced that Reza Taleghani will join the company as Executive Vice President (EVP) and Chief Financial Officer (CFO) in February 2026, succeeding David Bergman who has served for 21 years [1] - David Bergman will remain with the company until the first quarter of fiscal year 2027 to ensure a smooth transition [1] - Prior to joining Under Armour, Taleghani served as EVP and CFO at Samsonite since 2018 [1]

Group 1 - Under Armour has announced a key appointment to drive growth in the Chinese market, with Carol Chen set to become the Vice President and General Manager for the region starting November 9 [2] - Carol Chen brings over 30 years of leadership experience and has held senior positions in various multinational companies, showcasing her capability in strategic planning, digital transformation, and performance management [2] - Under Armour believes that Chen's deep insights into the Chinese market and her proven track record in driving significant business growth make her an ideal leader for this strategic core market [2]

Core Viewpoint - Under Armour reported a revenue of $1.3 billion for Q2 of fiscal year 2026, reflecting a year-over-year decline of 5% [1] Financial Performance - Revenue for the quarter reached $1.3 billion, down 5% year-over-year [1] - Gross margin decreased by 250 basis points to 47.3% [1] - Inventory continued to optimize, decreasing by 6% [1] Market Performance - Revenue in the North American market declined by 8% [1] - International market revenue grew by 2% year-over-year [1] - The Asia-Pacific region, which includes China, generated revenue of $179 million for the quarter [1] Strategic Focus - The company plans to enhance strategic focus and innovation investment to sustain long-term growth momentum [1]

Revenue Performance - Total net revenues decreased by 4.7% compared to the same period last year[174] - Wholesale revenue decreased by 6.2%, while direct-to-consumer revenue decreased by 2.2%[174] - Apparel revenue decreased by 1.1%, footwear revenue decreased by 15.7%, and accessories revenue decreased by 2.8%[174] - Net revenues for the three months ended September 30, 2025, decreased by $65.6 million, or 4.7%, to $1.33 billion compared to $1.40 billion in the same period of 2024[180] - Net sales decreased by $63.1 million, or 4.6%, to $1.31 billion during the three months ended September 30, 2025, primarily due to lower average selling prices and unfavorable channel mix[181] - For the six months ended September 30, 2025, net revenues decreased by $115.2 million, or 4.5%, to $2.47 billion compared to $2.58 billion in the same period of 2024[180] - Net revenues in North America decreased by $71.8 million or 8.3% during the three months ended September 30, 2025[211] - Net revenues in EMEA increased by $34.5 million or 12.2% during the three months ended September 30, 2025[214] - Net revenues in Asia-Pacific decreased by $28.5 million or 13.7% during the three months ended September 30, 2025[216] - Net revenues in Latin America increased by $6.9 million or 14.6% during the three months ended September 30, 2025[218] - Corporate Other net revenues decreased by $6.7 million during the three months ended September 30, 2025, primarily due to foreign currency hedge losses[220] Profitability and Margins - Gross margin decreased by 250 basis points to 47.3%[174] - Gross profit decreased by $65.5 million to $630.6 million during the three months ended September 30, 2025, with a gross margin decline to 47.3% from 49.8%[187] - Gross profit for the six months ended September 30, 2025, decreased by $81.7 million to $1.18 billion, with a gross margin decline to 47.7% from 48.7%[188] - Estimated negative impact of approximately $100 million to cost of goods sold in Fiscal 2026 due to increased tariffs, affecting gross profit by approximately 200 basis points[176] Expenses and Charges - Selling, general and administrative expenses increased by 11.9%[174] - Selling, general and administrative expenses increased by $61.8 million, or 11.9%, to $581.6 million during the three months ended September 30, 2025, representing 43.6% of net revenues[192] - Restructuring and related charges totaled $36.4 million for the three months ended September 30, 2025[175] - Restructuring charges increased significantly by 893.3% to $31.9 million during the three months ended September 30, 2025, compared to $3.2 million in the same period of 2024[194] - Marketing and advertising costs increased by $28.4 million or 22.6%, rising to 11.5% of net revenues from 9.0%[195] - Other costs increased by $33.4 million or 8.5%, rising to 32.1% of net revenues from 28.2%[195] Operating Income - North America operating income decreased by $79.3 million, or 36.5%, for the three months ended September 30, 2025, primarily due to lower net revenues and higher product input costs[223] - EMEA operating income increased by $1.0 million, or 1.9%, for the three months ended September 30, 2025, driven by higher net revenues[225] - Latin America operating income decreased by $7.6 million, or 62.2%, for the three months ended September 30, 2025, primarily due to higher product input costs[229] - Total operating income for the three months ended September 30, 2025, was $17.0 million, a decrease of $156.0 million or 90.2% compared to the previous year[221] Cash Flow and Financing - Cash and cash equivalents as of September 30, 2025, were approximately $396 million[235] - Cash flows used in operating activities decreased by $147.4 million for the six months ended September 30, 2025, compared to the previous year[246] - Total capital expenditures during the six months ended September 30, 2025, were $55.9 million, representing a $35.7 million decrease from the previous year[247] - Cash flows from financing activities increased by $689.9 million, primarily due to the issuance of $400 million of Senior Notes due 2030 and $200 million of borrowings under the revolving credit facility[248] - The company repurchased $25 million of Class C Common Stock during the three months ended September 30, 2025, totaling 5.2 million shares[241] - The company repurchased $25 million of Class C Common Stock during the six months ended September 30, 2025, compared to $40 million repurchased in the same period of 2024[248] - As of September 30, 2025, there was a total of $200 million outstanding under the revolving credit facility, with no amounts outstanding as of March 31, 2025[251] - The amended credit agreement provides for an aggregate $1.1 billion of revolving credit commitments, expiring on June 16, 2030[250] - The company issued $400 million in aggregate principal amount of 7.25% Senior Notes due July 15, 2030, with interest payable semi-annually starting January 15, 2026[262] - The company satisfied and discharged the Senior Notes due 2026 by depositing sufficient funds for all remaining principal and interest payments[260] - The company is required to maintain a consolidated EBITDA to consolidated interest expense ratio of not less than 3.50 to 1.0[256] - As of September 30, 2025, the company was in compliance with all applicable covenants under the amended credit agreement[256] - The company has $45.6 million of letters of credit outstanding as of September 30, 2025[253] - The Senior Notes due 2026 remain on the Condensed Consolidated Balance Sheets and will accrete to their par value until maturity in June 2026[261] Strategic Focus - The company is focused on enhancing digital strategy to improve consumer engagement and brand connectivity[172] - The 2025 restructuring plan is expected to incur up to $160 million in pre-tax charges, including $90 million in cash-related charges[173]

Core Insights - Under Armour reported Q2 FY2026 revenue of $1.3 billion, a 5% year-over-year decline, with gross margin decreasing by 250 basis points to 47.3% [1] - North American revenue fell by 8%, while international revenue grew by 2% [1] - The company announced a leadership change in China, appointing Carol Chen as Vice President and General Manager, effective November 9 [1] Financial Performance - Q2 FY2026 revenue: $1.3 billion, down 5% year-over-year [1] - Gross margin: 47.3%, a decrease of 250 basis points [1] - Inventory decreased by 6% [1] Market Performance - North America: Revenue declined by 8% [1] - International markets: Revenue increased by 2% [1] Strategic Initiatives - Under Armour is focusing on the Chinese market with several initiatives, including partnerships with national rugby teams and support for women's sports [1] - Recent product upgrades include the HALO series and UA Velociti Elite3 running shoes [1] - The company is enhancing its brand presence through events like the November fitness challenge in Shanghai and the August Curry Asia tour, which attracted 14,000 attendees and generated significant exposure [1] Future Outlook - Under Armour aims to deepen localization efforts in China, enhance connections with consumers and the industry, and contribute to the sustainable development of the Chinese sports industry [2]

Financial Data and Key Metrics Changes - Revenue declined 5% to $1.3 billion, slightly better than the outlook shared in August [30] - Gross margin declined 250 basis points year-over-year to 47.3%, primarily due to supply chain headwinds and unfavorable channel mix [33] - Adjusted operating income was $53 million, outperforming expectations [36] - Reported diluted loss per share was $0.04, with adjusted diluted earnings per share also at $0.04 [36] Business Line Data and Key Metrics Changes - North America revenue decreased 8%, primarily due to a decline in full-price wholesale and lower e-commerce sales [31] - EMEA revenue increased 12%, driven by full-price wholesale and strong growth in the DTC channel [31] - APAC revenue declined 14%, mainly driven by the wholesale business [31] - Apparel revenue declined 1%, while footwear revenue declined 16% due to challenging consumer demand [32] Market Data and Key Metrics Changes - Latin America revenue increased 15%, with strong growth across wholesale and DTC [31] - Direct-to-consumer revenue declined 2%, primarily due to an 8% decrease in e-commerce sales [32] - Licensing revenues increased 17%, driven by strength in the international business [32] Company Strategy and Development Direction - The company is focused on a turnaround strategy that emphasizes product innovation, storytelling, and brand positioning [7][28] - A streamlined assortment strategy has been implemented, cutting 25% of SKUs to enhance focus on key products [9] - The company aims to build on successful franchises and return to growth in upcoming seasons [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's potential and the importance of storytelling to connect with consumers [26][49] - The company anticipates a decline in full-year revenue of 4-5% for fiscal 2026, with expectations for stabilization in North America by fiscal 2027 [37][39] - Management highlighted the importance of maintaining high standards and building trust through performance [7] Other Important Information - A leadership transition is underway, with Reza Taghavi set to join as CFO in February 2026 [5] - The company is addressing structural challenges in APAC and aims to stabilize the business for growth in fiscal 2027 [24][25] Q&A Session Summary Question: What makes you confident that North America will see stabilization before the end of fiscal 2027? - Stabilization means getting the business to a healthy version, with a focus on structural elements, product elevation, and storytelling opportunities [44][45] Question: Can you elaborate on NeoLast and its significance? - NeoLast is a sustainable fiber that replaces Lycra, showcasing innovation in upcoming products [51][52] Question: What is being done to enhance the marketing voice for track and field? - The company is leveraging partnerships and focusing on authentic storytelling to enhance its presence in the running category [54][58] Question: Can you discuss the footwear business challenges? - The company is committed to footwear and is transitioning to a strategy that emphasizes aspiration and innovation rather than relying solely on brand heat [63]

Core Viewpoint - Under Armour reported a fiscal second-quarter loss due to declining sales in sportswear, indicating that this trend is expected to persist throughout the remainder of the fiscal year [1] Company Summary - Under Armour experienced a loss in the fiscal second quarter, attributed to a decrease in sportswear sales [1] - The company has issued a warning that the decline in sales is likely to continue for the rest of the fiscal year [1]

Revenue Performance - Revenue decreased 5 percent to $1.3 billion, with North American revenue declining 8 percent to $792 million and international revenue growing 2 percent to $551 million[3] - Net revenues for the three months ended September 30, 2025, were $1,333,380, a decrease of 4.7% compared to $1,399,023 in the same period of 2024[17] - North America segment revenues decreased by 8.3% to $791,502 for the three months ended September 30, 2025, compared to $863,345 in 2024[17] - Direct-to-consumer revenues decreased by 2.2% to $538,136 for the three months ended September 30, 2025, compared to $550,336 in 2024[19] - Total net revenue growth (decline) for the six months ended September 30, 2025, was (4.5)%, with a currency-neutral net revenue decline of (5.2)%[29] Profitability and Margins - Gross margin declined by 250 basis points to 47.3 percent, primarily due to supply chain headwinds and increased tariffs[3] - Gross profit for the three months ended September 30, 2025, was $630,584, representing 47.3% of net revenues, down from 49.8% in 2024[17] - Operating income was $17 million, while adjusted operating income, excluding transformation expenses and restructuring charges, was $53 million[3] - Projected operating income for fiscal 2026 is expected to range from $19 million to $34 million, with adjusted operating income forecasted between $90 million and $105 million[7] - Adjusted income from operations for the six months ended September 30, 2025, was $77,806 thousand, compared to $174,077 thousand in 2024[33] Net Income and Loss - Net loss was $19 million, with adjusted net income reported at $15 million[3] - The company reported a net loss of $18,814 for the three months ended September 30, 2025, compared to a net income of $170,382 in 2024[17] - For the six months ended September 30, 2025, the net income was $(21,426) thousand, compared to $(135,044) thousand for the same period in 2024, indicating an improvement[27] - The company reported an adjusted net income of $23,854 thousand for the six months ended September 30, 2025, compared to $134,770 thousand in 2024[35] Expenses - Selling, general, and administrative (SG&A) expenses increased 12 percent to $582 million, with adjusted SG&A expenses rising 9 percent to $577 million[3] - The company experienced a significant increase in restructuring charges, which amounted to $31,906 for the three months ended September 30, 2025, compared to $3,212 in 2024[17] - Adjusted selling, general and administrative expenses for the six months ended September 30, 2025, were $1,099,274 thousand, compared to $1,084,730 thousand in 2024[31] Cash and Assets - Cash and cash equivalents totaled $396 million, with inventory declining 6 percent to $1.0 billion[6] - Total current assets increased to $2,943,783 as of September 30, 2025, from $2,329,097 as of March 31, 2025[25] - Total liabilities rose to $3,043,800 as of September 30, 2025, compared to $2,410,593 as of March 31, 2025[25] - Cash flows from operating activities for the six months ended September 30, 2025, were $(20,978) thousand, an improvement from $(168,409) thousand in 2024[27] - Net cash provided by financing activities for the six months ended September 30, 2025, was $560,462 thousand, compared to $(129,392) thousand in 2024[27] Stock and Shareholder Actions - Under Armour repurchased $25 million of its Class C common stock, retiring 5.2 million shares during the quarter[4] - The outlook for the year ending March 31, 2026, estimates adjusted income from operations to be between $90 million and $105 million[40] - The adjusted diluted net income per share for the year ending March 31, 2026, is projected to be between $0.03 and $0.05[41] - The company maintained a total of 447 doors as of September 30, 2025, compared to 446 doors in the previous year[43]