Under Armour widens loss outlook as tariffs bite

Core Viewpoint - Under Armour reported a decline in third-quarter revenue and a worsened full-year loss outlook, attributing these issues to weaker demand in North America and increased US tariffs [1][5]. Financial Performance - Net revenue for Q3 2025 decreased by 5% year-on-year to $1.33 billion, or 6% lower on a currency-neutral basis [1] - The company experienced a quarterly net loss of $431 million, which included a $247 million valuation allowance related to US federal deferred tax assets [1] - Adjusted net income for the quarter was $37 million [1] Sales Breakdown - Wholesale sales fell by 6% to $660 million, while direct-to-consumer revenue dropped by 4% to $647 million, with online sales down by 7% [2] - Apparel revenue decreased by 3% to $934 million, footwear revenue declined by 12% to $265 million, and accessories revenue fell by 3% to $108 million [2] Cost and Margin Analysis - Gross margin contracted by 310 basis points to 44.4%, primarily due to tariffs, pricing pressures, and an unfavorable sales mix [2] - Selling, general and administrative (SG&A) costs rose by 4% to $665 million, largely due to a $99 million litigation reserve and $3 million in restructuring-related expenses [3] - On an adjusted basis, SG&A expenses fell by 7% [3] Regional Performance - North America revenue dropped by 10% to $757 million, partially offset by a 3% increase in international revenue, with EMEA up by 6% and Latin America up by 20% [4] - Revenue in the Asia Pacific region declined by 5% [4] Inventory and Cash Position - Inventory decreased by 2% to $1.1 billion, with the company ending the quarter with $465 million in cash and $600 million in restricted investments for upcoming debt repayments [4] Full-Year Outlook - For the full year, Under Armour expects revenue to decline by 4% and forecasts an operating loss of $154 million, compared to earlier guidance of a $56 million to $71 million loss [5] - Adjusted operating income is projected to be near $110 million, with diluted loss per share expected to be between $1.24 and $1.25 [5]