Under Armour, Inc. (NYSE:UAA) faces a challenging stretch as it works through a brand and product reset amid soft consumer demand.The sportswear company is also staring down steep tariff-related cost pressure in fiscal 2026, which could weigh heavily on earnings.Telsey Advisory Group analyst Cristina Fernández reiterated a Market Perform rating on Under Armour, with a price target of $5.Under Armour will release its second-quarter fiscal 2026 results on Nov. 6.Also Read: What’s Going On With Bloom Energy St ...

Core Viewpoint - Under Armour, Inc. is set to release its second quarter fiscal 2026 results on November 6, 2025, with a conference call scheduled for 8:30 a.m. ET to discuss the results [1]. Group 1: Company Overview - Under Armour, Inc. is headquartered in Baltimore, Maryland, and is recognized as a leading inventor, marketer, and distributor of branded athletic performance apparel, footwear, and accessories [2]. - The company's products are designed to empower human performance, with a focus on innovation to enhance athletic capabilities [2].

Core Insights - Under Armour, Inc. (UAA) reported a decline in first-quarter fiscal 2026 results, primarily due to regional weaknesses and a challenging macroeconomic environment [1][9] - North America, the largest revenue contributor, experienced a 5.5% year-over-year decline, attributed to lower wholesale orders and weaker retail traffic [1][9] - Management anticipates continued pressure in the second quarter, forecasting a low double-digit revenue decline [2][6] Regional Performance - International revenues fell 1.4% year over year to $466.6 million, with EMEA showing a 9.6% increase while APAC and Latin America faced declines [3][4] - APAC revenues dropped 10%, reflecting weaker consumer confidence and a competitive retail environment [4] - Latin America saw a 15.3% revenue decline, partly due to foreign currency headwinds, with a currency-neutral decline of 8% [5] Strategic Focus - Under Armour's strategy in APAC emphasizes rebuilding premium positioning through tighter distribution and disciplined pricing [4] - The company aims to restore sustainable growth momentum in fiscal 2026 despite current challenges [4][6] - Management is focused on strengthening regional operations and improving long-term revenue quality [6] Financial Metrics - UAA shares have declined 29.8% over the past three months, compared to a 5.5% decline in the industry [7] - The company is trading at a forward 12-month price-to-sales ratio of 0.41X, significantly lower than the industry average of 1.50X [8] - The Zacks Consensus Estimate for fiscal 2026 earnings indicates an 83.9% year-over-year decline, while fiscal 2027 estimates suggest a 310.9% increase [11]

Core Insights - Under Armour, Inc.'s first-quarter fiscal 2026 performance shows significant improvements due to ongoing cost optimization and restructuring efforts [1] Cost Optimization and Restructuring - The company has streamlined operations by reducing SKUs, consolidating materials, and tightening product assortments, leading to improved sourcing and lower costs while focusing on core product categories [2] - The restructuring plan has generated $35 million in savings for fiscal 2025, with an additional $45 million expected in fiscal 2026 [2] - Selling, general and administrative (SG&A) expenses improved, with adjusted SG&A declining by 5.9% year over year, and reported SG&A falling by 37% [3] - The restructuring program has included operational streamlining, such as the planned closure of the Rialto distribution center, resulting in $110 million in charges since the plan's launch [4] Gross Margin and Profitability - Under Armour achieved a gross margin expansion of 70 basis points to 48.2%, supported by favorable foreign currency effects, pricing advantages, and a favorable product mix [5] - The margin expansion reflects the company's strategy to elevate its brand by premiumizing core products and focusing on higher full-price sell-through, moving away from discount-driven sales [6] Valuation and Market Performance - Under Armour's shares have declined by 27.7% over the past six months, compared to an 18% decline in the industry [7] - The company is trading at a forward 12-month price-to-sales ratio of 0.41X, significantly lower than the industry average of 1.53X [8] Earnings Estimates - The Zacks Consensus Estimate for Under Armour's fiscal 2026 earnings indicates a year-over-year decline of 80.7%, while fiscal 2027 estimates suggest a recovery with a 280% increase [11]

Core Thesis - Under Armour, Inc. is experiencing renewed investor interest due to significant insider activity and a turnaround strategy under CEO Mr. Liedtke, which mirrors successful tactics from his time at Adidas [2][5]. Company Performance - As of September 16th, Under Armour's share price was $4.8600, with trailing and forward P/E ratios of 22.09 and 81.30 respectively [1]. - The brand maintains strong resonance in North America and is gaining traction in EMEA, while competitors like Nike may face spending constraints, allowing Under Armour to capitalize on emerging trends [3]. Insider Activity - All board members accepted RSU grants without selling shares, and key members made outright purchases, indicating strong insider confidence in the company's future [2]. - Notably, Mohamed El-Erian purchased shares for the first time since becoming Chairman, further emphasizing insider alignment with the company's strategy [2][5]. Strategic Initiatives - Under Armour is selectively expanding its retail presence through boutiques to preserve brand value and is underrepresented in specialty running retailers, presenting opportunities for enhanced exposure, particularly with the Halo shoe line [3]. - Current guidance for EPS ranges from $0.05 to $0.25, suggesting potential upside if operational execution improves [3]. Financial Considerations - Tariffs are expected to pressure North American gross margins by approximately 200 basis points in 2Q26, but this does not fully account for the significant EBIT margin compression indicated by guidance [4]. - A $27 million insurance benefit in 2Q25 was disclosed but not factored into adjustments, highlighting conservative accounting practices [4]. Investment Narrative - With strong brand equity, strategic flexibility, and insider alignment, Under Armour presents a compelling investment narrative with multiple catalysts for upside if operational execution and market recognition accelerate [5][6].

Core Viewpoint - The analyst issued a sell rating for Under Armour, citing concerns over high valuation and lack of growth potential [1] Group 1: Company Analysis - Under Armour's valuation is considered too high, leading to a sell recommendation [1] - The investment strategy focuses on identifying undervalued companies with long-term growth potential [1] Group 2: Investment Philosophy - The investment approach combines value investing principles with a focus on long-term growth [1] - The belief is in purchasing quality companies at a discount to their intrinsic value and holding them for compounding earnings and shareholder returns [1]

Group 1 - The article reflects on a visit to a sporting goods store in Europe, highlighting the presence of a prominent Under Armour logo, suggesting a nostalgic connection to the brand [1] - The author emphasizes a belief in the efficiency of financial markets, indicating that most stocks generally reflect their true current value [1] - The best investment opportunities are identified as those in stocks that are less followed by average investors or those that do not accurately represent existing market opportunities [1]

Core Viewpoint - Under Armour Inc (UAA) has potential for a long-term turnaround but faces near-term margin pressure due to tariffs and wholesale uncertainty [1] Group 1: Analyst Ratings and Price Target - Analyst Lorraine Hutchinson from BofA Securities reiterated a Neutral rating and reduced the price target from $8 to $6.50 [1] - The company is expected to generate weaker sales and lower margins through fiscal years 2026 and 2027 primarily due to tariffs [1] Group 2: Financial Performance and Guidance - Under Armour reported adjusted earnings in line with expectations for the first quarter, with softer sales offset by cost control [2] - Management guided for second-quarter sales and margins to fall short of market expectations, anticipating a 6%-7% decline in sales and a gross margin contraction of 340-360 basis points [2] Group 3: Market Behavior and Stock Performance - Management noted that both consumers and wholesale partners have shown hesitance in purchasing behavior, with the second quarter expected to be the weakest sales growth quarter of the year [3] - At the time of publication, shares of Under Armour had declined by 4.50% to $5.20 [3]

Group 1 - Under Armour, Inc. reported fiscal Q1 results for the April-June period on August 8, showing a moderate decline in sales [1] - The company provided weak guidance for Q2, indicating potential challenges ahead [1] Group 2 - The company operates in the athletic apparel and footwear industry, which is facing competitive pressures [1]

Core Insights - Under Armour, Inc. reported first-quarter fiscal 2026 results with revenues exceeding estimates but earnings missing expectations, indicating a mixed performance [1][3] - The company emphasized brand momentum and strategic focus on premium products and pricing innovation despite a challenging environment [2] Financial Performance - Adjusted earnings were 2 cents per share, missing the Zacks Consensus Estimate of 3 cents, but increased from 1 cent per share in the prior year [3][10] - Net revenues were $1,134.1 million, beating the consensus estimate of $1,132 million but down 4.2% year over year [3][10] - Wholesale revenues fell 4.6% to $649.1 million, while direct-to-consumer revenues declined 3.5% to $463.5 million [4] Revenue Breakdown - Apparel revenues decreased 1.5% to $746.6 million, exceeding the estimate of $729.4 million, while footwear revenues dropped 14.3% to $265.9 million, missing the estimate of $286.4 million [5] - Revenues from North America declined 5.5% to $670.3 million, missing the estimate of $675.6 million, while international revenues decreased 1.4% to $466.6 million [6] Margin Analysis - Gross profit was $546.5 million, down 2.9% year over year, but gross margin expanded 70 basis points to 48.2% due to favorable foreign exchange rates and improved pricing [8] - Adjusted selling, general and administrative expenses decreased 5.9% to $522.1 million, excluding transformation costs [9] Future Outlook - For Q2 fiscal 2026, revenues are expected to decline 6-7% compared to the same period in fiscal 2025, with varying performance across regions [15] - Gross margin is projected to contract 340-360 basis points due to supply-chain headwinds and unfavorable channel mix [16] - Adjusted operating income is estimated between $30 million and $40 million, with a forecasted loss per share of 7 to 8 cents [18]