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]
Restructuring & Cost Optimization Boost UAA's Margins & Efficiency