Early estimates from a top retail analyst are indicating a more subdued back- to-school spending season that sees shoppers searching for value and sticking to the necessities. Though she does see a slight uptick in spending from 2024. Joining us now is that analyst Telsey Group chief Chelsea Advisory Group chief research officer and CEO Dana Telsey.Dana, it's great to speak with you today. Great to see you too. Thank you so much for having me.Okay. The fact that we're that you're expecting at least a little ...

Welcome to Yahoo Finance's flagship show, The Morning Brief. I'm Julie Hyman. Let's get to the three things you need to know today.First up, US stock futures pointing to gains at the open. And the NASDAQ composite set to open at a new record high. It's the top performer this week, up nearly 3%.Even with the flurry of tariff headlines over the week, markets took it in stride, as they have been. But Bank of America's Michael Hartnett warning that investors are preparing for a pullback. In a new note, he says ...

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]

Company Overview - Proactive is a financial news publisher that provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The company has a team of experienced and qualified news journalists who produce independent content [2] Market Focus - Proactive specializes in medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - The news team delivers insights across various sectors including biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Technology Adoption - Proactive is recognized for its forward-looking approach and enthusiastic adoption of technology to enhance workflows [4] - The company utilizes automation and software tools, including generative AI, while ensuring that all content is edited and authored by humans [5]

Financial Data and Key Metrics Changes - First quarter revenue declined 4% to $1.1 billion, with regional results showing a 5% decline in North America, a 10% increase in EMEA, a 10% decline in APAC, and a 15% decline in Latin America [40][41] - Gross margin increased by 70 basis points year over year to 48.2%, driven by favorable foreign currency impacts and pricing benefits [43] - SG&A expenses decreased by 37% to $530 million, reflecting lower marketing and savings from restructuring efforts [44] Business Line Data and Key Metrics Changes - Apparel revenue declined 1%, footwear revenue decreased by 14%, while accessories grew by 8% [41][43] - The company is focusing on reducing SKUs by 25% and cutting materials by 30% for 2025 products to streamline operations and improve pricing [10][11] Market Data and Key Metrics Changes - North America is expected to see a low double-digit revenue decline, while EMEA is projected to deliver high single-digit growth [50] - APAC revenue is anticipated to decline at a low teen rate due to weak consumer sentiment [50] Company Strategy and Development Direction - The company is undergoing a transformation to become a more focused brand, emphasizing sports, style, and innovation while maintaining financial discipline [4][6] - A two-lever strategy is being implemented to address tariff impacts and improve brand health through premium product offerings and better pricing [57][58] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenging environment due to tariffs and limited consumer spending but remains optimistic about brand health and future growth [7][38] - The company expects operating income for fiscal 2026 to be roughly half of fiscal 2025 levels due to increased costs and demand pressures [49] Other Important Information - The company is focusing on building deeper connections with consumers and enhancing brand authenticity [6][7] - A renewed partnership with the NFL and various influencer collaborations are part of the strategy to engage younger demographics [31][34] Q&A Session Summary Question: How are tariffs impacting demand from wholesale partners? - Management noted that the tariff environment is challenging but emphasized that their strategy remains focused on creating desirable products and improving pricing power [56][57] Question: Can you elaborate on brand health improvements? - Management highlighted improvements in brand perception, particularly among the 18 to 34 demographic, and noted positive trends in sell-through rates for key products [60][62] Question: What is the outlook for the order book for the holiday season? - Management indicated that while there is some uncertainty due to tariffs, there is positive momentum with new product launches and retailer engagement [90][91]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Under Armour's unaudited condensed consolidated financial statements, including balance sheets, income, comprehensive income, equity, and cash flows, with detailed notes for recent periods [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | | :----- | :--------------------------- | :---------------------------- | | Total Assets | $4,865,191 | $4,300,871 | | Total Liabilities | $2,990,762 | $2,410,593 | | Total Stockholders' Equity | $1,874,429 | $1,890,278 | | Cash and Cash Equivalents | $910,985 | $501,361 | | Inventories | $1,141,829 | $945,836 | | Current Maturities of Long-Term Debt | $599,757 | $0 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (%) | | :----- | :---------------------------------------------- | :---------------------------------------------- | :--------- | | Net Revenues | $1,134,068 | $1,183,665 | -4.2% | | Gross Profit | $546,496 | $562,675 | -2.9% | | Income (Loss) from Operations | $3,323 | $(299,728) | +101.1% | | Net Income (Loss) | $(2,612) | $(305,426) | +99.1% | | Basic Net Income (Loss) per Share | $(0.01) | $(0.70) | +98.6% | | Diluted Net Income (Loss) per Share | $(0.01) | $(0.70) | +98.6% | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :----- | :---------------------------------------------- | :---------------------------------------------- | | Net Income (Loss) | $(2,612) | $(305,426) | | Foreign Currency Translation Adjustment | $29,536 | $(16,563) | | Unrealized Gain (Loss) on Cash Flow Hedges, net of tax | $(48,911) | $17,616 | | Total Other Comprehensive Income (Loss) | $(18,523) | $289 | | Comprehensive Income (Loss) | $(21,135) | $(305,137) | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) | Metric | Balance as of March 31, 2025 (in thousands) | Balance as of June 30, 2025 (in thousands) | | :----- | :------------------------------------------ | :----------------------------------------- | | Total Stockholders' Equity | $1,890,278 | $1,874,429 | | Retained Earnings | $746,277 | $736,180 | | Accumulated Other Comprehensive Income (Loss) | $(93,938) | $(112,461) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change ($) | | :----- | :---------------------------------------------- | :---------------------------------------------- | :--------- | | Net Cash Provided by (Used in) Operating Activities | $48,852 | $152,975 | $(104,123) | | Net Cash Provided by (Used in) Investing Activities | $(35,362) | $4,319 | $(39,681) | | Net Cash Provided by (Used in) Financing Activities | $387,303 | $(128,220) | $515,523 | | Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | $410,107 | $26,244 | $383,863 | | Cash, Cash Equivalents and Restricted Cash, End of Period | $925,158 | $903,161 | $21,997 | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Detailed disclosures for condensed consolidated financial statements, covering business operations, accounting policies, and key financial components [Note 1. Description of Business and Basis of Presentation](index=10&type=section&id=Note%201.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) - Under Armour, Inc. develops, markets, and distributes branded athletic performance apparel, footwear, and accessories globally, aiming to inspire athletes with innovative performance and design solutions[26](index=26&type=chunk) [Note 2. Recent Accounting Pronouncements](index=10&type=section&id=Note%202.%20Recent%20Accounting%20Pronouncements) - The company is evaluating ASU 2024-03 (Disaggregation of Income Statement Expenses), effective for annual periods after December 15, 2026, and ASU 2023-09 (Improvements to Income Tax Disclosures), effective for fiscal years after December 15, 2024, which is expected to expand disclosures but not materially impact financial statements[34](index=34&type=chunk)[35](index=35&type=chunk) [Note 3. Property and Equipment](index=11&type=section&id=Note%203.%20Property%20and%20Equipment) | Metric | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | | :----- | :--------------------------- | :---------------------------- | | Property and Equipment, net | $613,174 | $645,147 | | Accumulated Depreciation | $(1,071,207) | $(1,123,776) | - Depreciation expense for property and equipment was **$28.6 million** for the three months ended June 30, 2025, a decrease from **$32.5 million** in the prior year period[36](index=36&type=chunk) [Note 4. Leases](index=11&type=section&id=Note%204.%20Leases) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :----- | :---------------------------------------------- | :---------------------------------------------- | | Operating Lease Costs | $41,035 | $37,793 | | Variable Lease Costs | $18,289 | $21,501 | | Sublease Income | $3,400 | $1,000 | - As of June 30, 2025, the weighted average remaining lease term was **7.04 years** with a weighted average discount rate of **4.81%**[40](index=40&type=chunk) [Note 5. Goodwill](index=13&type=section&id=Note%205.%20Goodwill) | Segment | Balance as of March 31, 2025 (in thousands) | Effect of Currency Translation Adjustment (in thousands) | Balance as of June 30, 2025 (in thousands) | | :------ | :------------------------------------------ | :------------------------------------------------------- | :----------------------------------------- | | North America | $309,487 | $0 | $309,487 | | EMEA | $103,055 | $7,400 | $110,455 | | Asia-Pacific | $75,090 | $1,163 | $76,253 | | Total | $487,632 | $8,563 | $496,195 | [Note 6. Supply Chain Finance Program](index=15&type=section&id=Note%206.%20Supply%20Chain%20Finance%20Program) - Outstanding payment obligations under the supply chain finance program increased to **$245.7 million** as of June 30, 2025, from **$143.8 million** as of March 31, 2025[47](index=47&type=chunk) [Note 7. Credit Facility and Other Long Term Debt](index=15&type=section&id=Note%207.%20Credit%20Facility%20and%20Other%20Long%20Term%20Debt) | Debt Instrument | As of June 30, 2025 (in thousands) | As of March 31, 2025 (in thousands) | | :-------------- | :--------------------------------- | :---------------------------------- | | 3.25% Senior Notes due 2026 | $600,000 | $600,000 | | 7.25% Senior Notes due 2030 | $400,000 | $0 | | Total Principal Payments Due | $1,000,000 | $600,000 | | Non-current Portion of Long-Term Debt | $389,457 | $595,125 | | Current Portion of Long-Term Debt | $599,757 | $0 | - The company issued **$400.0 million** of 7.25% Senior Notes due July 15, 2030, and intends to use the proceeds, along with other funds, to redeem or retire the **$600.0 million** 3.25% Senior Notes due 2026 during the second quarter of Fiscal 2026[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) - The revolving credit facility was amended in June 2025, providing **$1.1 billion** in commitments that has a term ending on June 16, 2030, with no amounts outstanding as of June 30, 2025[49](index=49&type=chunk) [Note 8. Commitments and Contingencies](index=18&type=section&id=Note%208.%20Commitments%20and%20Contingencies) - A proposed settlement for the Consolidated Kenney Derivative Action and Consolidated Paul Derivative Action was reached, including corporate governance measures for three years and an **$8.9 million** payment to the company, funded by insurance proceeds[73](index=73&type=chunk) - The company is in litigation with certain insurance carriers regarding coverage for a previously settled Consolidated Securities Action, with **$90 million** of insurance proceeds recognized as of June 30, 2025, remaining subject to the appeal[85](index=85&type=chunk) [Note 9. Stockholders' Equity](index=22&type=section&id=Note%209.%20Stockholders'%20Equity) - Kevin Plank, the founder, President, and CEO, maintains majority voting control through Class B Convertible Common Stock (10 votes per share), while Class A has one vote per share and Class C has no voting rights (except in limited circumstances)[87](index=87&type=chunk)[88](index=88&type=chunk) - The Board authorized a **$500 million** share repurchase program for Class C Common Stock through May 31, 2027. As of the reporting date, **$90 million** (12.8 million shares) has been repurchased, with **$410 million** remaining. No repurchases occurred in Q1 Fiscal 2026[90](index=90&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk) [Note 10. Revenues](index=23&type=section&id=Note%2010.%20Revenues) | Revenue Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (%) | | :--------------- | :---------------------------------------------- | :---------------------------------------------- | :--------- | | Apparel | $746,592 | $757,792 | -1.5% | | Footwear | $265,855 | $310,389 | -14.3% | | Accessories | $100,078 | $92,545 | +8.1% | | Net Sales | $1,112,525 | $1,160,726 | -4.2% | | License Revenues | $24,362 | $21,671 | +12.4% | | Total Net Revenues | $1,134,068 | $1,183,665 | -4.2% | | Distribution Channel | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (%) | | :------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------- | | Wholesale | $649,050 | $680,513 | -4.6% | | Direct-to-Consumer | $463,475 | $480,213 | -3.5% | [Note 11. Restructuring and Related Charges](index=24&type=section&id=Note%2011.%20Restructuring%20and%20Related%20Charges) - The 2025 restructuring plan is expected to incur **$140 million to $160 million** in pre-tax charges, with **$90 million** cash-related and **$70 million** non-cash, substantially complete by end of Fiscal 2026[98](index=98&type=chunk) | Restructuring Costs | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Estimated Charges Remaining (in thousands) | | :------------------ | :---------------------------------------------- | :---------------------------------------------- | :----------------------------------------- | | Total costs recorded in restructuring charges | $12,828 | $25,086 | $30,203 | | Total costs recorded in SG&A | $8,259 | $8,657 | $19,548 | | Total restructuring and related charges | $21,087 | $33,743 | $49,751 | [Note 12. Stock-Based Compensation](index=26&type=section&id=Note%2012.%20Stock-Based%20Compensation) - Total stock-based compensation expense for employees and non-employee directors was **$10.7 million** for Q1 Fiscal 2026, down from **$14.4 million** in Q1 Fiscal 2025. Unrecognized expense is **$89.1 million** over **2.45 years**[103](index=103&type=chunk) - Awards to marketing and other partners resulted in **$1.8 million** in stock-based compensation expense for Q1 Fiscal 2026, with **$63.0 million** unrecognized expense over **9.14 years**[109](index=109&type=chunk) | Stock Options Activity | Number of Stock Options | Weighted Average Exercise Price | | :--------------------- | :---------------------- | :------------------------------ | | Outstanding at March 31, 2025 | 1,356 | $16.68 | | Granted | 150 | $6.20 | | Outstanding at June 30, 2025 | 1,506 | $15.63 | [Note 13. Fair Value Measurements](index=28&type=section&id=Note%2013.%20Fair%20Value%20Measurements) | Financial Instrument | June 30, 2025 (Level 2, in thousands) | March 31, 2025 (Level 2, in thousands) | | :------------------- | :------------------------------------ | :------------------------------------- | | Derivative foreign currency contracts | $(63,482) | $192 | | Deferred Compensation Plan obligations | $(17,775) | $(16,830) | | TOLI policies held by Rabbi Trust | $9,610 | $8,726 | - The estimated fair value of long-term debt as of June 30, 2025, was **$998.1 million**, compared to **$583.9 million** as of March 31, 2025, classified as Level 2[120](index=120&type=chunk) [Note 14. Risk Management and Derivatives](index=30&type=section&id=Note%2014.%20Risk%20Management%20and%20Derivatives) - The aggregate notional value of outstanding cash flow hedges was **$1,365.5 million** as of June 30, 2025, up from **$1,113.6 million** as of March 31, 2025, with maturities ranging from one to twenty-four months[129](index=129&type=chunk) - The total notional value of outstanding undesignated derivative instruments was **$514.5 million** as of June 30, 2025, compared to **$450.7 million** as of March 31, 2025[133](index=133&type=chunk) [Note 15. Provision for Income Taxes](index=33&type=section&id=Note%2015.%20Provision%20for%20Income%20Taxes) - The effective income tax rate increased significantly to **49.0%** for the three months ended June 30, 2025, from **(1.7)%** for the same period in 2024, primarily due to changes in actual and forecasted annual pre-tax earnings[136](index=136&type=chunk) - The company is assessing the impact of the recently enacted OBBBA (One Big Beautiful Bill Act) on U.S. taxation of foreign earnings, bonus depreciation, and research expensing[137](index=137&type=chunk) [Note 16. Earnings Per Share](index=34&type=section&id=Note%2016.%20Earnings%20Per%20Share) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | | Basic Net Income (Loss) per Share | $(0.01) | $(0.70) | | Diluted Net Income (Loss) per Share | $(0.01) | $(0.70) | | Weighted Average Common Shares Outstanding (Basic) | 427,116 | 435,693 | [Note 17. Segment Data](index=34&type=section&id=Note%2017.%20Segment%20Data) - The company's operating segments are North America, EMEA, Asia-Pacific, and Latin America, with operating income (loss) used by the CODM for resource allocation[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) | Segment | Net Revenues (Q2 2025, in thousands) | Net Revenues (Q2 2024, in thousands) | Operating Income (Loss) (Q2 2025, in thousands) | Operating Income (Loss) (Q2 2024, in thousands) | | :------ | :----------------------------------- | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | North America | $670,319 | $709,260 | $121,437 | $147,889 | | EMEA | $248,607 | $226,892 | $39,643 | $20,456 | | Asia-Pacific | $163,386 | $181,836 | $14,703 | $9,935 | | Latin America | $54,575 | $64,409 | $6,606 | $15,171 | | Corporate Other | $(2,819) | $1,268 | $(179,066) | $(493,179) | | Total | $1,134,068 | $1,183,665 | $3,323 | $(299,728) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's analysis of financial condition, operations, and liquidity for Q1 Fiscal 2026, discussing key metrics, strategies, and macroeconomic factors [FORWARD LOOKING STATEMENTS](index=37&type=section&id=FORWARD%20LOOKING%20STATEMENTS) - Forward-looking statements cover topics such as share repurchase programs, future financial condition, growth strategies, restructuring efforts, promotional activities, freight, product cost pressures, foreign currency impacts, global economic conditions, and litigation[150](index=150&type=chunk) - Key risk factors include changes in economic/market conditions, global events (e.g., military conflicts, trade policy), increased competition, raw material costs, execution of long-term strategies, customer financial health, product development, inventory management, loss of key partners, global expansion, brand image, significant transactions, talent retention, regulatory compliance, data security, public health emergencies, and litigation[151](index=151&type=chunk)[155](index=155&type=chunk) [OVERVIEW](index=38&type=section&id=OVERVIEW) - Under Armour is focused on driving premium brand-right growth and improved profitability through increased sales in apparel, footwear, and accessories, growth in direct-to-consumer, and expansion of wholesale distribution[154](index=154&type=chunk) - Challenging market conditions persisted in Q1 Fiscal 2026, particularly in North America and Asia-Pacific, due to lower consumer demand across both wholesale and direct-to-consumer channels[155](index=155&type=chunk) - The 2025 restructuring plan, expected to be substantially complete by end of Fiscal 2026, aims to strengthen financial and operational efficiencies with estimated pre-tax charges of **$140 million to $160 million**[157](index=157&type=chunk) - Macroeconomic factors, including global trade policy changes, inflationary pressures, and foreign currency fluctuations, are expected to negatively impact Fiscal 2026 results, with an anticipated **$100 million** impact on cost of goods sold from incremental tariffs[159](index=159&type=chunk)[160](index=160&type=chunk) [RESULTS OF OPERATIONS](index=40&type=section&id=RESULTS%20OF%20OPERATIONS) Analysis of Q1 Fiscal 2026 financial performance, detailing changes in net revenues, gross profit, operating expenses, and net income (loss) [Revenues](index=40&type=section&id=Revenues) | Revenue Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change ($) | Change (%) | | :--------------- | :---------------------------------------------- | :---------------------------------------------- | :--------- | :--------- | | Total Net Revenues | $1,134,068 | $1,183,665 | $(49,597) | -4.2% | | Net Sales | $1,112,525 | $1,160,726 | $(48,201) | -4.2% | | License Revenues | $24,362 | $21,671 | $2,691 | +12.4% | - Apparel net sales decreased **1.5%** due to lower average selling prices and unfavorable channel mix, while footwear decreased **14.3%** due to lower unit sales and prices. Accessories increased **8.1%** due to higher unit sales[165](index=165&type=chunk) [Gross Profit](index=42&type=section&id=Gross%20Profit) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change ($) | Gross Margin (%) 2025 | Gross Margin (%) 2024 | | :----- | :---------------------------------------------- | :---------------------------------------------- | :--------- | :-------------------- | :-------------------- | | Gross Profit | $546,496 | $562,675 | $(16,179) | 48.2% | 47.5% | - Gross margin increased by **70 basis points** to **48.2%**, primarily driven by favorable foreign exchange (**55 bps**), product mix (**30 bps**), and pricing benefits (**30 bps**), partially offset by unfavorable channel mix (**30 bps**) and supply chain (**15 bps**)[169](index=169&type=chunk) [Selling, General and Administrative Expenses](index=42&type=section&id=Selling,%20General%20and%20Administrative%20Expenses) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change ($) | Change (%) | SG&A as % of Net Revenues 2025 | SG&A as % of Net Revenues 2024 | | :----- | :---------------------------------------------- | :---------------------------------------------- | :--------- | :--------- | :----------------------------- | :----------------------------- | | Selling, General and Administrative Expenses | $530,345 | $837,317 | $(306,972) | -36.7% | 46.8% | 70.7% | - The decrease in SG&A was primarily due to a **$296.4 million (41.4%)** reduction in "other costs" (mainly lower litigation reserve expense in the prior year) and a **$10.6 million (8.7%)** decrease in marketing and advertising costs[171](index=171&type=chunk) [Restructuring Charges](index=43&type=section&id=Restructuring%20Charges) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change ($) | Change (%) | | :----- | :---------------------------------------------- | :---------------------------------------------- | :--------- | :--------- | | Restructuring Charges | $12,828 | $25,086 | $(12,258) | -48.9% | [Interest Income (Expense), net](index=43&type=section&id=Interest%20Income%20(Expense),%20net) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change ($) | Change (%) | | :----- | :---------------------------------------------- | :---------------------------------------------- | :--------- | :--------- | | Interest Income (Expense), net | $(4,051) | $2,344 | $(6,395) | -272.8% | [Other Income (Expense), net](index=43&type=section&id=Other%20Income%20(Expense),%20net) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change ($) | Change (%) | | :----- | :---------------------------------------------- | :---------------------------------------------- | :--------- | :--------- | | Other Income (Expense), net | $(4,695) | $(2,730) | $(1,965) | -72.0% | [Income Tax Expense (Benefit)](index=43&type=section&id=Income%20Tax%20Expense%20(Benefit)) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change ($) | Change (%) | Effective Tax Rate 2025 | Effective Tax Rate 2024 | | :----- | :---------------------------------------------- | :---------------------------------------------- | :--------- | :--------- | :---------------------- | :---------------------- | | Income Tax Expense (Benefit) | $(2,658) | $5,149 | $(7,807) | -151.6% | 49.0% | -1.7% | [SEGMENT RESULTS OF OPERATIONS](index=44&type=section&id=SEGMENT%20RESULTS%20OF%20OPERATIONS) Analysis of net revenues and operating income (loss) across geographic segments and Corporate Other, highlighting regional performance drivers [Net Revenues](index=44&type=section&id=Net%20Revenues) | Segment | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change ($) | Change (%) | | :------ | :---------------------------------------------- | :---------------------------------------------- | :--------- | :--------- | | North America | $670,319 | $709,260 | $(38,941) | -5.5% | | EMEA | $248,607 | $226,892 | $21,715 | +9.6% | | Asia-Pacific | $163,386 | $181,836 | $(18,450) | -10.1% | | Latin America | $54,575 | $64,409 | $(9,834) | -15.3% | | Corporate Other | $(2,819) | $1,268 | $(4,087) | -322.3% | | Total Net Revenues | $1,134,068 | $1,183,665 | $(49,597) | -4.2% | - North America revenues decreased **5.5%** due to declines in wholesale and direct-to-consumer. EMEA revenues increased **9.6%** driven by wholesale and owned/operated retail stores, positively impacted by foreign exchange. Asia-Pacific revenues decreased **10.1%** due to wholesale and e-commerce declines. Latin America revenues decreased **15.3%** primarily due to negative foreign exchange impacts[184](index=184&type=chunk) [Operating Income (Loss)](index=46&type=section&id=Operating%20Income%20(Loss)) | Segment | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change ($) | Change (%) | | :------ | :---------------------------------------------- | :---------------------------------------------- | :--------- | :--------- | | North America | $121,437 | $147,889 | $(26,452) | -17.9% | | EMEA | $39,643 | $20,456 | $19,187 | +93.8% | | Asia-Pacific | $14,703 | $9,935 | $4,768 | +48.0% | | Latin America | $6,606 | $15,171 | $(8,565) | -56.5% | | Corporate Other | $(179,066) | $(493,179) | $314,113 | +63.7% | | Total Operating Income (Loss) | $3,323 | $(299,728) | $303,051 | +101.1% | - Corporate Other operating loss decreased by **$314.1 million (63.7%)** primarily due to lower net litigation expense in the prior year. EMEA operating income increased **93.8%** due to lower marketing and facility expenses and higher gross profit. North America operating income decreased **17.9%** due to lower gross profit and higher marketing/distribution costs[187](index=187&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=46&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Discussion of cash requirements, funding sources, and capital structure, including cash, share repurchases, cash flow, credit facility, and senior notes - As of June 30, 2025, the company had **$911 million** in cash and cash equivalents and believes its current liquidity sources are adequate for at least the next twelve months[188](index=188&type=chunk) - The company plans to use proceeds from the **$400 million** Senior Notes due 2030, credit facility borrowings, and cash on hand to retire the **$600 million** Senior Notes due 2026 in Q2 Fiscal 2026[188](index=188&type=chunk) [Share Repurchase Program](index=47&type=section&id=Share%20Repurchase%20Program) - The Board authorized a **$500 million** share repurchase program for Class C Common Stock through May 31, 2027. No shares were repurchased in Q1 Fiscal 2026, leaving **$410 million** remaining[191](index=191&type=chunk)[192](index=192&type=chunk) [Cash Flows](index=48&type=section&id=Cash%20Flows) | Cash Flow Activity | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change ($) | | :----------------- | :---------------------------------------------- | :---------------------------------------------- | :--------- | | Operating Activities | $48,852 | $152,975 | $(104,123) | | Investing Activities | $(35,362) | $4,319 | $(39,681) | | Financing Activities | $387,303 | $(128,220) | $515,523 | - Operating cash flows decreased by **$104.1 million**, primarily due to a **$366.4 million** decrease from changes in working capital, partially offset by a **$262.2 million** increase in net income before non-cash items[194](index=194&type=chunk) - Financing cash flows increased by **$515.5 million**, primarily due to the issuance of **$400 million** Senior Notes due 2030[196](index=196&type=chunk) [Capital Resources](index=48&type=section&id=Capital%20Resources) - The amended credit agreement provides **$1.1 billion** in revolving credit commitments until June 16, 2030, with no amounts outstanding as of June 30, 2025. The company was in compliance with all covenants[199](index=199&type=chunk)[204](index=204&type=chunk) - The company issued **$400.0 million** of 7.25% Senior Notes due 2030, intending to use the proceeds to redeem or retire the **$600.0 million** 3.25% Senior Notes due 2026 in Q2 Fiscal 2026[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk) [CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS](index=51&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES%20AND%20ASSUMPTIONS) - Financial statements rely on complex judgments, probabilities, and assumptions that are inherently uncertain, and actual results could differ significantly from these estimates[212](index=212&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No significant changes to market risk since March 31, 2025, with further discussion available in the Annual Report on Form 10-K - No significant changes to market risk have occurred since March 31, 2025[214](index=214&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were ineffective due to a material weakness in internal control over financial reporting, with remediation efforts ongoing [Evaluation of Disclosure Controls and Procedures](index=51&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - The CEO and CFO concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness in internal control over financial reporting[215](index=215&type=chunk) [Material Weakness in Internal Control Over Financial Reporting](index=52&type=section&id=Material%20Weakness%20in%20Internal%20Control%20Over%20Financial%20Reporting) - A material weakness exists in internal control over financial reporting due to ineffective controls over the review and execution of certain balance sheet account reconciliations, which resulted in immaterial errors in prior financial statements[216](index=216&type=chunk) [Remediation Efforts and Status of Remaining Material Weakness](index=52&type=section&id=Remediation%20Efforts%20and%20Status%20of%20Remaining%20Material%20Weakness) - Remediation efforts include developing a new account reconciliation policy, designing and enhancing controls, and engaging third-party consultants, with completion expected throughout Fiscal 2026[217](index=217&type=chunk)[219](index=219&type=chunk) [Changes in Internal Control Over Financial Reporting](index=52&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, other than ongoing remediation efforts for the identified material weakness[218](index=218&type=chunk) [PART II - OTHER INFORMATION](index=53&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) Information on legal proceedings is incorporated by reference from Note 8 to the Condensed Consolidated Financial Statements - Information on legal proceedings is incorporated by reference from Note 8 to the Condensed Consolidated Financial Statements[221](index=221&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) Refers to risk factors in the Annual Report on Form 10-K for Fiscal 2025, noting potential impact from additional unknown or immaterial risks - Readers should consider risk factors from the Annual Report on Form 10-K for Fiscal 2025, as additional unknown or currently immaterial risks could negatively impact the business[222](index=222&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No repurchases of Class C Common Stock occurred under the authorized share repurchase program during the three months ended June 30, 2025 | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of a Publicly Announced Program | Approximately Dollar Value of Shares that May Yet be Purchased Under the Program (in millions) | | :----- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------- | :------------------------------------------------------------------------------------------- | | 04/01/2025 to 04/30/2025 | — | $— | — | $410.0 | | 05/01/2025 to 05/31/2025 | — | $— | — | $410.0 | | 06/01/2025 to 06/30/2025 | — | $— | — | $410.0 | [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q1 Fiscal 2026 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[225](index=225&type=chunk) [Item 6. Exhibits](index=54&type=section&id=Item%206.%20Exhibits) Lists exhibits filed as part of the Form 10-Q, including indentures, credit agreement amendments, and certifications - Exhibits include Indentures for Senior Notes, Amendment No. 7 and 8 to the Amended and Restated Credit Agreement, and Section 302 and 906 certifications[226](index=226&type=chunk) [SIGNATURES](index=55&type=section&id=SIGNATURES) - The report was duly signed on behalf of Under Armour, Inc. by David E. Bergman, Chief Financial Officer, on August 8, 2025[229](index=229&type=chunk)

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company reported a **net loss of $2.6 million** for Q1 FY2026, a substantial improvement from the prior year, with total assets increasing to **$4.87 billion** and positive operating cash flow of **$48.9 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | **Total Current Assets** | $2,902,858 | $2,329,097 | | Cash and cash equivalents | $910,985 | $501,361 | | Inventories | $1,141,829 | $945,836 | | **Total Assets** | **$4,865,191** | **$4,300,871** | | **Total Current Liabilities** | $1,895,375 | $1,109,143 | | Current maturities of long-term debt | $599,757 | $— | | **Total Liabilities** | **$2,990,762** | **$2,410,593** | | **Total Stockholders' Equity** | **$1,874,429** | **$1,890,278** | Condensed Consolidated Statement of Operations Highlights (in thousands) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net revenues | $1,134,068 | $1,183,665 | | Gross profit | $546,496 | $562,675 | | Income (loss) from operations | $3,323 | $(299,728) | | **Net income (loss)** | **$(2,612)** | **$(305,426)** | | **Diluted EPS** | **$(0.01)** | **$(0.70)** | Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $48,852 | $152,975 | | Net cash used in investing activities | $(35,362) | $4,319 | | Net cash provided by (used in) financing activities | $387,303 | $(128,220) | | **Net increase in cash** | **$410,107** | **$26,244** | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Disclosures detail the **2025 restructuring plan** incurring **$12.8 million** in charges, a **$400 million** new senior note issuance, and an **$8.9 million** litigation settlement payment - The company issued **$400.0 million** in 7.25% senior unsecured notes due 2030, with proceeds intended to redeem or discharge the **$600.0 million** 3.25% senior notes due 2026 during the second quarter of Fiscal 2026[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) - A settlement was reached in the Derivative Actions, including the company implementing various corporate governance measures for three years and receiving a payment of **$8.9 million**, funded by insurance proceeds, on behalf of the defendants[73](index=73&type=chunk) 2025 Restructuring Plan Charges (in thousands) | Charge Category | Three Months Ended June 30, 2025 | Estimated Charges Remaining | | :--- | :--- | :--- | | Costs in restructuring charges | $12,828 | $30,203 | | Costs in SG&A expenses | $8,259 | $19,548 | | **Total restructuring & related charges** | **$21,087** | **$49,751** | Net Revenues by Product Category (in thousands) | Product Category | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | Apparel | $746,592 | $757,792 | | Footwear | $265,855 | $310,389 | | Accessories | $100,078 | $92,545 | | **Total Net Sales** | **$1,112,525** | **$1,160,726** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Quarterly revenue declined **4.2%** due to market challenges, yet gross margin improved to **48.2%** and SG&A decreased **36.7%**, with **$911 million** in cash bolstering liquidity [Overview and Quarterly Results](index=38&type=section&id=Overview%20and%20Quarterly%20Results) Total net revenues decreased **4.2%** due to challenging market conditions, with Footwear revenue down **14.3%**, while gross margin improved **70 basis points** to **48.2%** - Key financial highlights for the quarter ended June 30, 2025 compared to the prior year include: total net revenues decreased **4.2%**, wholesale revenue decreased **4.6%**, direct-to-consumer revenue decreased **3.5%**, Footwear revenue decreased **14.3%**, and gross margin increased **70 basis points** to **48.2%**[156](index=156&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Net revenues decreased **4.2%** to **$1.13 billion**, primarily from a **14.3%** drop in Footwear, while gross margin improved to **48.2%** and SG&A expenses fell **36.7%** Revenue Breakdown and Change (in thousands) | Category | Q1 FY2026 | Q1 FY2025 | Change (%) | | :--- | :--- | :--- | :--- | | **By Product** | | | | | Apparel | $746,592 | $757,792 | (1.5)% | | Footwear | $265,855 | $310,389 | (14.3)% | | Accessories | $100,078 | $92,545 | 8.1% | | **By Channel** | | | | | Wholesale | $649,050 | $680,513 | (4.6)% | | Direct-to-consumer | $463,475 | $480,213 | (3.5)% | - Gross margin increased by **70 basis points**, driven by favorable foreign exchange (**+55 bps**), product mix (**+30 bps**), and pricing benefits (**+30 bps**), partially offset by unfavorable channel mix (**-30 bps**) and supply chain costs (**-15 bps**)[169](index=169&type=chunk) - SG&A expenses decreased by **$307.0 million** (**36.7%**), primarily due to lower litigation reserve expense compared to the prior year, which included costs for settling the Consolidated Securities Action litigation[171](index=171&type=chunk)[172](index=172&type=chunk) [Segment Results of Operations](index=44&type=section&id=Segment%20Results%20of%20Operations) North America revenue declined **5.5%**, while EMEA revenue grew **9.6%** with operating income surging **93.8%**, and Corporate Other's operating loss significantly narrowed Net Revenues by Geographic Segment (in thousands) | Region | Q1 FY2026 | Q1 FY2025 | Change (%) | | :--- | :--- | :--- | :--- | | North America | $670,319 | $709,260 | (5.5)% | | EMEA | $248,607 | $226,892 | 9.6% | | Asia-Pacific | $163,386 | $181,836 | (10.1)% | | Latin America | $54,575 | $64,409 | (15.3)% | Operating Income (Loss) by Geographic Segment (in thousands) | Region | Q1 FY2026 | Q1 FY2025 | Change (%) | | :--- | :--- | :--- | :--- | | North America | $121,437 | $147,889 | (17.9)% | | EMEA | $39,643 | $20,456 | 93.8% | | Asia-Pacific | $14,703 | $9,935 | 48.0% | | Latin America | $6,606 | $15,171 | (56.5)% | | Corporate Other | $(179,066) | $(493,179) | 63.7% | [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds **$911 million** in cash, with operating cash flow at **$48.9 million**, and issued **$400 million** in new senior notes while retaining **$410 million** for share repurchases - The company had approximately **$911 million** of cash and cash equivalents as of June 30, 2025[188](index=188&type=chunk) - On June 23, 2025, the company issued **$400 million** in aggregate principal amount of 7.25% senior unsecured notes due 2030[196](index=196&type=chunk)[207](index=207&type=chunk) - No shares were repurchased during the three months ended June 30, 2025, with approximately **$410 million** remaining under the current share repurchase program[192](index=192&type=chunk)[224](index=224&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No significant changes to market risk have occurred since March 31, 2025, with further details available in the Fiscal 2025 Annual Report - There have been no significant changes to the company's market risk since March 31, 2025[214](index=214&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed ineffective due to a material weakness in balance sheet account reconciliations, with remediation efforts ongoing through Fiscal 2026 - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were not effective due to a material weakness in internal control over financial reporting[215](index=215&type=chunk) - The material weakness relates to the company not designing and maintaining effective controls over the review and execution of certain balance sheet account reconciliations[216](index=216&type=chunk) - Remediation efforts are underway, including implementing a new account reconciliation policy, enhancing controls, and training process owners, with these efforts expected to continue throughout Fiscal 2026[217](index=217&type=chunk)[219](index=219&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, with specific details on certain matters referenced in Note 8 of the financial statements - The company refers to Note 8 of the Condensed Consolidated Financial Statements for information on certain legal proceedings[221](index=221&type=chunk) [Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) No new risk factors are disclosed in this report, with comprehensive details available in the Fiscal 2025 Annual Report on Form 10-K - The company refers readers to the risk factors discussed in Part I, Item 1A of its Annual Report on Form 10-K for Fiscal 2025[222](index=222&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares of Class C Common Stock were repurchased during the quarter, leaving approximately **$410.0 million** available under the repurchase program Issuer Purchases of Equity Securities (Q1 FY2026) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining Under Program (in millions) | | :--- | :--- | :--- | :--- | | April 2025 | — | $— | $410.0 | | May 2025 | — | $— | $410.0 | | June 2025 | — | $— | $410.0 | [Other Information](index=53&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter - No director or officer of the Company adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter[225](index=225&type=chunk) [Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including indentures, credit agreement amendments, and officer certifications

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]

Core Viewpoint - Under Armour's Q1 FY2026 earnings report indicates operational progress with improved gross margins and adjusted operating income, despite a decline in GAAP revenue and adjusted EPS falling short of expectations [1][2][3] Financial Performance - GAAP revenue for Q1 FY2026 was $1,134 million, a decrease of 4.2% year-over-year and 2.0% below analyst expectations of $1,155 million [1][3] - Adjusted EPS was $0.02, below Wall Street's estimate of $0.03, reflecting ongoing sales declines and an uncertain outlook [2][3] - Adjusted operating income increased to $24 million from $8 million in the prior year, while GAAP net income improved to -$2.6 million from -$305 million [10][11] Revenue Trends - North America, Under Armour's largest market, saw a 5.5% revenue decline to $670 million, while international revenue fell 1% to $467 million [6] - EMEA revenue grew by 9.6% to $248.6 million, contrasting with declines in Asia-Pacific (down 10.1%) and Latin America (down 15.3%) [6] - Direct-to-consumer (DTC) sales contracted by 3.5%, with e-commerce revenue shrinking by 12% [7][13] Product and Market Dynamics - Apparel revenue decreased by 1.5%, while footwear revenue dropped 14.3%, indicating competitive challenges [8] - Accessories revenue increased by 8.1%, showcasing some product category resilience [8] - The company is focusing on premiumization and brand strength through high-profile partnerships and innovative product launches [5][12] Strategic Focus Areas - Under Armour is prioritizing digital engagement and expanding its DTC and e-commerce channels, despite a deliberate pullback on discounting [5][13] - Supply chain management remains critical, with ongoing risks related to sourcing and tariffs [14] - The company aims to streamline operations and cut costs through a transformation plan, expecting annual savings of $75 million by the end of FY2026 [11][12] Future Outlook - For Q2 FY2026, management anticipates a revenue decline of 6-7%, with gross margin projected to drop by 3.4-3.6 percentage points [16] - Adjusted operating income is expected to be in the range of $30-40 million, with adjusted diluted EPS forecasted between $0.01 and $0.02 [16] - There is significant uncertainty regarding tariffs, cost inflation, and consumer demand, leading to no full-year guidance [16][17]