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]

Core Insights - Under Armour reported revenue of $1.13 billion for the quarter ended June 2025, a decrease of 4.2% year-over-year, with an EPS of $0.02 compared to $0.01 in the same quarter last year [1] - The revenue matched the Zacks Consensus Estimate, indicating a surprise of +0.2%, while the EPS fell short of expectations by 33.33% [1] Revenue Performance - Total revenue from North America was $670.32 million, below the average estimate of $675.6 million, reflecting a year-over-year decline of 5.5% [4] - Asia-Pacific revenues were reported at $163.39 million, exceeding estimates of $153.59 million, but still down 10.2% year-over-year [4] - Latin America generated $54.58 million, below the average estimate of $57.58 million, marking a 15.3% decline year-over-year [4] - EMEA revenues reached $248.61 million, slightly above the estimate of $244.35 million, showing a year-over-year increase of 9.6% [4] Product Revenue Breakdown - Apparel sales were $746.59 million, surpassing the estimate of $729.4 million, but down 1.5% year-over-year [4] - Footwear revenue was $265.86 million, significantly below the estimate of $286.42 million, representing a 14.4% decline [4] - Accessories generated $100.08 million, exceeding the estimate of $92.39 million, with an 8.1% year-over-year increase [4] - License revenues were reported at $24.36 million, above the estimate of $21.59 million, reflecting a 12.4% increase year-over-year [4] Distribution Channel Performance - Wholesale revenues were $649.05 million, below the average estimate of $663.75 million, indicating a 4.6% decline year-over-year [4] - Direct to Consumer revenues reached $463.48 million, exceeding the estimate of $444.5 million, but down 3.5% year-over-year [4] Stock Performance - Under Armour's stock has returned -6.2% over the past month, contrasting with the S&P 500 composite's +1.9% change, and currently holds a Zacks Rank 4 (Sell) [3]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________ Form 10-Q ______________________________________ (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-33202 ______________________________ ...

Group 1: Earnings Performance - Under Armour reported quarterly earnings of $0.02 per share, missing the Zacks Consensus Estimate of $0.03 per share, representing an earnings surprise of -33.33% [1] - The company posted revenues of $1.13 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.20%, but down from $1.18 billion year-over-year [2] - Over the last four quarters, Under Armour has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Group 2: Stock Performance and Outlook - Under Armour shares have lost about 19.8% since the beginning of the year, while the S&P 500 has gained 7.8% [3] - The company's earnings outlook is crucial for investors, with current consensus EPS estimates of $0.26 on $1.36 billion in revenues for the coming quarter and $0.33 on $5.06 billion in revenues for the current fiscal year [7] Group 3: Industry Context - The Textile - Apparel industry, to which Under Armour belongs, is currently in the bottom 23% of over 250 Zacks industries, indicating a challenging environment [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Under Armour's stock performance [5]

Under Armour forecast worse-than-expected sales for the current quarter, stalling a turnaround plan that was taking hold https://t.co/OmOpQueKtR ...

[Executive Summary & Strategic Overview](index=1&type=section&id=Executive%20Summary%20%26%20Strategic%20Overview) [Company Overview & Strategic Direction](index=1&type=section&id=Company%20Overview%20%26%20Strategic%20Direction) Under Armour is executing a strategic transformation to enhance brand credibility, innovation, and operational discipline - Under Armour is undergoing a bold transformation to sharpen its brand, emphasizing sports credibility, innovation, style, and operational discipline[2](index=2&type=chunk) - Strategic focus includes strengthening brand positioning with premium products, increasing average selling prices through innovative offerings, optimizing top-volume programs, and creating a more compelling full price-to-value proposition[2](index=2&type=chunk) [First Quarter Fiscal 2026 Financial Review](index=1&type=section&id=First%20Quarter%20Fiscal%202026%20Financial%20Review) [Consolidated Financial Performance](index=1&type=section&id=Consolidated%20Financial%20Performance) The company's Q1 FY26 revenue declined while gross margin improved, resulting in a significantly reduced net loss compared to the prior year Q1 Fiscal 2026 Key Financial Highlights | Metric | Q1 FY26 (2025) | Q1 FY25 (2024) | Change (YoY) | | :-------------------------------- | :------------- | :------------- | :----------- | | Revenue | $1.1 billion | $1.18 billion | -4% (-4% currency neutral) | | Gross Margin | 48.2% | 47.5% | +70 bps | | Operating Income (GAAP) | $3 million | $(299.7) million | N/A | | Net Loss (GAAP) | $3 million | $(305.4) million | N/A | | Adjusted Net Income | $9 million | $3.7 million | N/A | | Diluted Loss Per Share (GAAP) | $(0.01) | $(0.70) | N/A | | Adjusted Diluted Earnings Per Share | $0.02 | $0.01 | N/A | - Gross margin increase was primarily due to favorable foreign exchange, pricing, and product mix, partially offset by an unfavorable channel mix and higher supply chain costs[3](index=3&type=chunk) [Revenue Breakdown](index=1&type=section&id=Revenue%20Breakdown) Q1 FY26 revenue declined across most segments and channels, with footwear showing the most significant drop [Revenue by Geographic Segment](index=1&type=section&id=Revenue%20by%20Geographic%20Segment) North America and Asia-Pacific revenues declined, while the EMEA region was the only segment to report growth Q1 Fiscal 2026 Revenue by Geographic Segment | Segment | Revenue (2025, in millions) | % Change (YoY) | Currency Neutral % Change (YoY) | | :-------------- | :-------------------------- | :-------------- | :------------------------------ | | North America | $670 | -5% | -5.3% | | International | $467 | -1% | -2.2% | | EMEA | $248.6 | +10% | +6.0% | | Asia-Pacific | $163.4 | -10% | -10.3% | | Latin America | $54.6 | -15% | -7.7% | [Revenue by Distribution Channel](index=1&type=section&id=Revenue%20by%20Distribution%20Channel) Both wholesale and direct-to-consumer channels experienced revenue declines, with a notable drop in eCommerce sales Q1 Fiscal 2026 Revenue by Distribution Channel | Channel | Revenue (2025, in millions) | % Change (YoY) | | :---------------- | :-------------------------- | :-------------- | | Wholesale | $649 | -5% | | Direct-to-consumer | $463 | -3% | | Owned & Operated Stores | N/A | +1% | | eCommerce | N/A | -12% | - eCommerce revenue accounted for **31%** of the total direct-to-consumer business for the quarter[3](index=3&type=chunk) [Revenue by Product Category](index=1&type=section&id=Revenue%20by%20Product%20Category) Footwear revenue declined significantly and apparel saw a slight decrease, while accessories revenue grew Q1 Fiscal 2026 Revenue by Product Category | Product Category | Revenue (2025, in millions) | % Change (YoY) | | :--------------- | :-------------------------- | :-------------- | | Apparel | $747 | -1% | | Footwear | $266 | -14% | | Accessories | $100 | +8% | [Operating Income by Segment](index=7&type=section&id=Operating%20Income%20by%20Segment) Operating income decreased in North America and Latin America but improved in the EMEA and Asia-Pacific segments Q1 Fiscal 2026 Operating Income by Segment | Segment | Operating Income (2025, in thousands) | % of Net Revenues (2025) | Operating Income (2024, in thousands) | % of Net Revenues (2024) | | :-------------- | :------------------------------------ | :----------------------- | :------------------------------------ | :----------------------- | | North America | $121,437 | 18.1% | $147,889 | 20.9% | | EMEA | $39,643 | 15.9% | $20,456 | 9.0% | | Asia-Pacific | $14,703 | 9.0% | $9,935 | 5.5% | | Latin America | $6,606 | 12.1% | $15,171 | 23.6% | [Non-GAAP Adjustments & Reconciliations (Q1 FY26)](index=11&type=section&id=Non-GAAP%20Adjustments%20%26%20Reconciliations%20(Q1%20FY26)) Adjusted financial measures for Q1 FY26 exclude restructuring charges and litigation reserves to clarify core operational performance Q1 Fiscal 2026 Adjusted Financial Metrics | Metric | GAAP (2025, in thousands) | Adjusted (2025, in thousands) | GAAP (2024, in thousands) | Adjusted (2024, in thousands) | | :-------------------------------------- | :------------------------ | :-------------------------- | :------------------------ | :-------------------------- | | Selling, General & Administrative Expenses | $530,345 | $522,086 | $837,317 | $554,660 | | Operating Income (Loss) | $3,323 | $24,410 | $(299,728) | $8,015 | | Net Income (Loss) | $(2,612) | $8,568 | $(305,426) | $3,656 | | Diluted EPS | $(0.01) | $0.02 | $(0.70) | $0.01 | [Fiscal 2025 Restructuring Plan](index=2&type=section&id=Fiscal%202025%20Restructuring%20Plan) [Restructuring Plan Details](index=2&type=section&id=Restructuring%20Plan%20Details) The company initiated a restructuring plan to improve efficiencies, with total estimated costs between $140 million and $160 million - Restructuring plan announced in May 2024 aims to improve financial and operational efficiencies[4](index=4&type=chunk) - Estimated total cost of the plan is between **$140 million and $160 million**, with up to **$90 million** cash-related and **$70 million** non-cash charges[4](index=4&type=chunk) - As of Q1 FY26, **$110 million** in charges have been recorded, with **$65 million** cash-related and **$45 million** non-cash-related[4](index=4&type=chunk) - Remaining charges are anticipated to be recognized by the end of fiscal 2026[4](index=4&type=chunk) [Second Quarter Fiscal 2026 Outlook](index=2&type=section&id=Second%20Quarter%20Fiscal%202026%20Outlook) [Financial Projections](index=2&type=section&id=Financial%20Projections) The Q2 FY26 outlook projects a revenue decline and significant gross margin compression, leading to a potential operating loss - Revenue is expected to decline **6-7%** in Q2 FY26[6](index=6&type=chunk) - North America revenue is anticipated to decrease by a **low-double-digit percentage**, while EMEA is projected to grow at a **high-single-digit rate**, and Asia-Pacific to decline by a **low-teens percentage**[6](index=6&type=chunk) - Gross margin is expected to decline **340-360 basis points**, mainly due to supply chain headwinds and unfavorable channel mix[6](index=6&type=chunk) - Operating income is expected to range from a **$10 million loss to $0 million**, with adjusted operating income forecasted between **$30 million and $40 million**[6](index=6&type=chunk) - Diluted loss per share is expected to range from **$0.07 to $0.08**, with adjusted diluted earnings per share anticipated between **$0.01 and $0.02**[6](index=6&type=chunk) [Non-GAAP Adjustments & Reconciliations (Q2 FY26 Outlook)](index=13&type=section&id=Non-GAAP%20Adjustments%20%26%20Reconciliations%20(Q2%20FY26%20Outlook)) The Q2 FY26 outlook is adjusted for restructuring charges to provide a clearer view of expected core operating performance Q2 Fiscal 2026 Adjusted Outlook | Metric | GAAP Low Estimate | GAAP High Estimate | Adjusted Low Estimate | Adjusted High Estimate | | :-------------------------- | :---------------- | :----------------- | :-------------------- | :--------------------- | | Operating Income (Loss) | $(10) million | $0 million | $30 million | $40 million | | Diluted Loss Per Share | $(0.08) | $(0.07) | $0.01 | $0.02 | [Financial Statements](index=5&type=section&id=Financial%20Statements) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The Q1 FY26 statement of operations shows a significantly narrowed net loss compared to the prior year, driven by lower SG&A expenses Condensed Consolidated Statements of Operations (Unaudited; in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net revenues | $1,134,068 | $1,183,665 | | Cost of goods sold | $587,572 | $620,990 | | Gross profit | $546,496 | $562,675 | | Selling, general and administrative expenses | $530,345 | $837,317 | | Restructuring charges | $12,828 | $25,086 | | Income (loss) from operations | $3,323 | $(299,728) | | Net income (loss) | $(2,612) | $(305,426) | | Diluted net income (loss) per share | $(0.01) | $(0.70) | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities increased as of June 30, 2025, primarily due to higher cash, inventories, and new debt maturities Condensed Consolidated Balance Sheets (Unaudited; in thousands) | Metric | June 30, 2025 | March 31, 2025 | | :-------------------------- | :------------ | :------------- | | Total assets | $4,865,191 | $4,300,871 | | Cash and cash equivalents | $910,985 | $501,361 | | Inventories | $1,141,829 | $945,836 | | Total liabilities | $2,990,762 | $2,410,593 | | Current maturities of long-term debt | $599,757 | $0 | | Total stockholders' equity | $1,874,429 | $1,890,278 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash from operations decreased, but a significant inflow from financing activities led to a substantial increase in total cash Condensed Consolidated Statements of Cash Flows (Unaudited; in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | | Net cash provided by (used in) operating activities | $48,852 | $152,975 | | Net cash provided by (used in) investing activities | $(35,362) | $4,319 | | Net cash provided by (used in) financing activities | $387,303 | $(128,220) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $410,107 | $26,244 | | Cash, cash equivalents and restricted cash (End of period) | $925,158 | $903,161 | - Proceeds from long-term debt and revolving credit facility totaled **$400 million** in Q1 FY26[26](index=26&type=chunk) [Supplemental Information](index=3&type=section&id=Supplemental%20Information) [Non-GAAP Financial Information (General Explanation)](index=3&type=section&id=Non-GAAP%20Financial%20Information%20(General%20Explanation)) The company utilizes non-GAAP measures to exclude currency fluctuations and restructuring charges for a clearer view of operational performance - Non-GAAP measures like 'currency-neutral' and 'adjusted' results are used to provide valuable information for comparing operational results across different periods[8](index=8&type=chunk) - Currency-neutral data eliminates fluctuations in foreign currency exchange rates, while adjusted measures exclude effects of the fiscal year 2025 restructuring plan and associated charges[8](index=8&type=chunk) [Forward-Looking Statements & Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20%26%20Risk%20Factors) The report's forward-looking statements are subject to risks including economic conditions, competition, and supply chain issues - Forward-looking statements relate to expectations, beliefs, projections, plans, and strategies concerning matters that are not historical facts[10](index=10&type=chunk) - Actual activities or results may differ significantly due to risks, uncertainties, assumptions, and changes in circumstances[10](index=10&type=chunk) - Important factors that could cause material differences include changes in economic/market conditions, global events, trade environment, increased competition, fluctuations in raw material costs, ability to execute strategies, and impacts from litigation[11](index=11&type=chunk) [Company-Owned & Operated Door Count](index=14&type=section&id=Company-Owned%20%26%20Operated%20Door%20Count) The total number of company-owned and operated doors remained stable year-over-year at 442 globally Company-Owned & Operated Door Count | Region/Type | June 30, 2025 | June 30, 2024 | | :------------------ | :------------ | :------------ | | North America total | 195 | 200 | | International total | 247 | 241 | | Total doors | 442 | 441 | [Conference Call and Webcast](index=3&type=section&id=Conference%20Call%20and%20Webcast) A conference call and webcast were held on August 8, 2025, to discuss the first quarter fiscal 2026 results - The conference call for Q1 FY26 results was held on August 8, 2025, at approximately 8:30 a.m. Eastern Time[7](index=7&type=chunk) - The call was streamed live and is available for replay on the company's investor relations website: https://about.underarmour.com/investor-relations/financials[7](index=7&type=chunk) [Contact Information](index=4&type=section&id=Contact%20Information) Contact details for investor relations inquiries are provided - Contact for Finance & Capital Markets: Lance Allega, Senior Vice President[12](index=12&type=chunk) - Contact Phone: (410) 246-6810[12](index=12&type=chunk) - Contact Email: LAllega@underarmour.com[12](index=12&type=chunk)

Core Insights - Under Armour reported its unaudited financial results for the first quarter of fiscal 2026, ending June 30, 2025, showing a revenue decline of 4.2% year-over-year to $1.134 billion [5][13][15]. Financial Performance - The company experienced a gross margin increase of 70 basis points to 48.2%, attributed to favorable foreign exchange, pricing, and product mix, despite higher supply chain costs [5][13]. - Selling, general, and administrative expenses decreased by 37% to $530 million, with adjusted expenses down 6% to $522 million, excluding transformation expenses [5][13]. - The net loss for the quarter was $3 million, with an adjusted net income of $9 million, leading to a diluted loss per share of $0.01 and adjusted diluted earnings per share of $0.02 [5][13][26][28]. Revenue Breakdown - North American revenue decreased by 5% to $670 million, while international revenue declined by 1% to $467 million [5][14]. - Within international markets, EMEA revenue increased by 10%, while Asia-Pacific and Latin America saw declines of 10% and 15%, respectively [5][14]. - Apparel revenue decreased by 1% to $747 million, footwear revenue fell by 14% to $266 million, and accessories revenue increased by 8% to $100 million [5][16]. Restructuring Plan - Under Armour's restructuring plan, initiated in May 2024, is expected to cost between $140 million and $160 million, with $71 million in restructuring and impairment charges recorded by the end of Q1 fiscal 2026 [4][5]. - The company anticipates recognizing the remaining charges by the end of fiscal 2026 [4]. Outlook - For the second quarter of fiscal 2026, revenue is expected to decline by 6% to 7%, with a projected low-double-digit percent decrease in North America and high-single-digit percent growth in EMEA [6][11]. - Gross margin is anticipated to decline by 340 to 360 basis points due to supply chain headwinds and an unfavorable channel mix [6][11]. Cash and Liquidity - Cash and cash equivalents totaled $911 million, including $400 million raised from senior notes during the quarter, which will be used to manage upcoming debt obligations [5][19]. Company Overview - Under Armour, Inc. is a leading inventor, marketer, and distributor of branded athletic performance apparel, footwear, and accessories, headquartered in Baltimore, Maryland [9].