Core Insights - Under Armour Inc. reported second-quarter fiscal 2026 results that exceeded Wall Street expectations for earnings per share but fell short on full-year earnings guidance, leading to a more than 5% decline in share price during intra-day trading [1] Financial Performance - Earnings per share for the quarter were $0.04, surpassing consensus estimates of $0.02 [1] - Revenue for the quarter was $1.33 billion, slightly above the forecast of $1.31 billion, but represented a 5% decline year over year, or a 6% decline on a currency-neutral basis [1] - Gross margin decreased by 250 basis points to 47.3%, impacted by supply chain costs, higher tariffs, and an unfavorable product and regional mix [2] - Adjusted operating income, excluding transformation and restructuring expenses, was reported at $53 million [2] Future Guidance - For fiscal 2026, Under Armour projected earnings per share between $0.03 and $0.05, which is below the consensus estimate of $0.06 [3] - The company expects revenue to decline by 4% to 5%, with high-single-digit sales declines anticipated in North America and Asia-Pacific, partially offset by similar growth in EMEA [3] - Gross margin is expected to contract by 190 to 210 basis points, primarily due to increased U.S. tariffs, although favorable pricing and currency effects may mitigate some of the downside [3]

Revenue Performance - Total net revenues decreased by 4.7% compared to the same period last year[174] - Wholesale revenue decreased by 6.2%, while direct-to-consumer revenue decreased by 2.2%[174] - Apparel revenue decreased by 1.1%, footwear revenue decreased by 15.7%, and accessories revenue decreased by 2.8%[174] - Net revenues for the three months ended September 30, 2025, decreased by $65.6 million, or 4.7%, to $1.33 billion compared to $1.40 billion in the same period of 2024[180] - Net sales decreased by $63.1 million, or 4.6%, to $1.31 billion during the three months ended September 30, 2025, primarily due to lower average selling prices and unfavorable channel mix[181] - For the six months ended September 30, 2025, net revenues decreased by $115.2 million, or 4.5%, to $2.47 billion compared to $2.58 billion in the same period of 2024[180] - Net revenues in North America decreased by $71.8 million or 8.3% during the three months ended September 30, 2025[211] - Net revenues in EMEA increased by $34.5 million or 12.2% during the three months ended September 30, 2025[214] - Net revenues in Asia-Pacific decreased by $28.5 million or 13.7% during the three months ended September 30, 2025[216] - Net revenues in Latin America increased by $6.9 million or 14.6% during the three months ended September 30, 2025[218] - Corporate Other net revenues decreased by $6.7 million during the three months ended September 30, 2025, primarily due to foreign currency hedge losses[220] Profitability and Margins - Gross margin decreased by 250 basis points to 47.3%[174] - Gross profit decreased by $65.5 million to $630.6 million during the three months ended September 30, 2025, with a gross margin decline to 47.3% from 49.8%[187] - Gross profit for the six months ended September 30, 2025, decreased by $81.7 million to $1.18 billion, with a gross margin decline to 47.7% from 48.7%[188] - Estimated negative impact of approximately $100 million to cost of goods sold in Fiscal 2026 due to increased tariffs, affecting gross profit by approximately 200 basis points[176] Expenses and Charges - Selling, general and administrative expenses increased by 11.9%[174] - Selling, general and administrative expenses increased by $61.8 million, or 11.9%, to $581.6 million during the three months ended September 30, 2025, representing 43.6% of net revenues[192] - Restructuring and related charges totaled $36.4 million for the three months ended September 30, 2025[175] - Restructuring charges increased significantly by 893.3% to $31.9 million during the three months ended September 30, 2025, compared to $3.2 million in the same period of 2024[194] - Marketing and advertising costs increased by $28.4 million or 22.6%, rising to 11.5% of net revenues from 9.0%[195] - Other costs increased by $33.4 million or 8.5%, rising to 32.1% of net revenues from 28.2%[195] Operating Income - North America operating income decreased by $79.3 million, or 36.5%, for the three months ended September 30, 2025, primarily due to lower net revenues and higher product input costs[223] - EMEA operating income increased by $1.0 million, or 1.9%, for the three months ended September 30, 2025, driven by higher net revenues[225] - Latin America operating income decreased by $7.6 million, or 62.2%, for the three months ended September 30, 2025, primarily due to higher product input costs[229] - Total operating income for the three months ended September 30, 2025, was $17.0 million, a decrease of $156.0 million or 90.2% compared to the previous year[221] Cash Flow and Financing - Cash and cash equivalents as of September 30, 2025, were approximately $396 million[235] - Cash flows used in operating activities decreased by $147.4 million for the six months ended September 30, 2025, compared to the previous year[246] - Total capital expenditures during the six months ended September 30, 2025, were $55.9 million, representing a $35.7 million decrease from the previous year[247] - Cash flows from financing activities increased by $689.9 million, primarily due to the issuance of $400 million of Senior Notes due 2030 and $200 million of borrowings under the revolving credit facility[248] - The company repurchased $25 million of Class C Common Stock during the three months ended September 30, 2025, totaling 5.2 million shares[241] - The company repurchased $25 million of Class C Common Stock during the six months ended September 30, 2025, compared to $40 million repurchased in the same period of 2024[248] - As of September 30, 2025, there was a total of $200 million outstanding under the revolving credit facility, with no amounts outstanding as of March 31, 2025[251] - The amended credit agreement provides for an aggregate $1.1 billion of revolving credit commitments, expiring on June 16, 2030[250] - The company issued $400 million in aggregate principal amount of 7.25% Senior Notes due July 15, 2030, with interest payable semi-annually starting January 15, 2026[262] - The company satisfied and discharged the Senior Notes due 2026 by depositing sufficient funds for all remaining principal and interest payments[260] - The company is required to maintain a consolidated EBITDA to consolidated interest expense ratio of not less than 3.50 to 1.0[256] - As of September 30, 2025, the company was in compliance with all applicable covenants under the amended credit agreement[256] - The company has $45.6 million of letters of credit outstanding as of September 30, 2025[253] - The Senior Notes due 2026 remain on the Condensed Consolidated Balance Sheets and will accrete to their par value until maturity in June 2026[261] Strategic Focus - The company is focused on enhancing digital strategy to improve consumer engagement and brand connectivity[172] - The 2025 restructuring plan is expected to incur up to $160 million in pre-tax charges, including $90 million in cash-related charges[173]

Revenue Performance - Total net revenues decreased by 4.7% compared to the same period last year[174] - Wholesale revenue decreased by 6.2%, while direct-to-consumer revenue decreased by 2.2%[174] - Apparel revenue decreased by 1.1%, footwear revenue decreased by 15.7%, and accessories revenue decreased by 2.8%[174] - Net revenues for the three months ended September 30, 2025, decreased by $65.6 million, or 4.7%, to $1.33 billion compared to $1.40 billion in the same period of 2024[180] - Net sales decreased by $63.1 million, or 4.6%, to $1.31 billion during the three months ended September 30, 2025, primarily due to lower average selling prices and unfavorable channel mix[181] - For the six months ended September 30, 2025, net revenues decreased by $115.2 million, or 4.5%, to $2.47 billion compared to $2.58 billion in the same period of 2024[180] - North America net revenue decreased by 8.3%, while EMEA increased by 12.2%[174] - North America net revenues decreased by $71.8 million or 8.3% during the three months ended September 30, 2025[211] - EMEA net revenues increased by $34.5 million or 12.2% during the three months ended September 30, 2025[214] - Asia-Pacific net revenues decreased by $28.5 million or 13.7% during the three months ended September 30, 2025[216] - Latin America net revenues increased by $6.9 million or 14.6% during the three months ended September 30, 2025[218] - Corporate Other net revenues decreased by $6.7 million during the three months ended September 30, 2025, primarily due to foreign currency hedge losses[220] Profitability and Expenses - Gross margin decreased by 250 basis points to 47.3%[174] - Gross profit decreased by $65.5 million to $630.6 million during the three months ended September 30, 2025, with a gross margin decline to 47.3% from 49.8%[187] - Gross profit for the six months ended September 30, 2025, decreased by $81.7 million to $1.18 billion, with a gross margin decline to 47.7% from 48.7%[188] - Selling, general and administrative expenses increased by 11.9%[174] - Selling, general and administrative expenses increased by $61.8 million, or 11.9%, to $581.6 million during the three months ended September 30, 2025, representing 43.6% of net revenues[192] - Selling, general and administrative expenses decreased by $245.2 million, or 18.1%, during the six months ended September 30, 2025, representing 45.1% of net revenues[192] - Restructuring charges increased significantly by 893.3% to $31.9 million during the three months ended September 30, 2025, compared to $3.2 million in the same period of 2024[194] - Marketing and advertising costs increased by $28.4 million or 22.6%, rising to 11.5% of net revenues from 9.0%[195] - Other costs increased by $33.4 million or 8.5%, rising to 32.1% of net revenues from 28.2%[195] Financial Position and Cash Flow - Cash and cash equivalents as of September 30, 2025, were approximately $396 million[235] - Net cash used in operating activities was $(20,978) million for the six months ended September 30, 2025, a decrease of $147.4 million compared to the previous year[245] - Total capital expenditures during the six months ended September 30, 2025, were $55.9 million, representing a $35.7 million decrease from the previous year[247] - The company repurchased $25 million of Class C Common Stock during the three months ended September 30, 2025, totaling 5.2 million shares[241] - Approximately $650 million of additional current and prior foreign earnings were repatriated, including a $250 million cash dividend in Fiscal 2026[238] - The company has a share repurchase program authorized for up to $500 million through May 31, 2027, with approximately $385 million remaining[243] - Cash flows from financing activities increased by $689.9 million, primarily due to the issuance of $400 million in Senior Notes due 2030 and $200 million in borrowings under the revolving credit facility[248] - The company repurchased $25 million of Class C Common Stock during the six months ended September 30, 2025, compared to $40 million repurchased in the same period of 2024[248] - As of September 30, 2025, there was a total of $200 million outstanding under the revolving credit facility, with no amounts outstanding as of March 31, 2025[251] Debt and Financing - The company issued $400 million in Senior Notes due 2030, bearing interest at a fixed rate of 7.25% per annum, payable semi-annually starting January 15, 2026[262] - The company satisfied and discharged the Senior Notes due 2026 using net proceeds from the Senior Notes due 2030, along with borrowings and cash on hand[260] - The company is required to maintain a consolidated EBITDA to consolidated interest expense ratio of not less than 3.50 to 1.0[256] - As of September 30, 2025, the company was in compliance with all applicable covenants under the amended credit agreement[256] - The amended credit agreement provides for $1.1 billion in revolving credit commitments, expiring on June 16, 2030, with a springing maturity of 91 days prior if Senior Notes due 2030 are not refinanced[250] - The amended credit agreement contains negative covenants that limit the company's ability to incur additional indebtedness and engage in certain transactions[255] - The company has $45.6 million of letters of credit outstanding as of September 30, 2025[253] Strategic Initiatives - The 2025 restructuring plan is expected to incur up to $160 million in pre-tax charges, including $90 million in cash-related charges[173] - Estimated negative impact of approximately $100 million to cost of goods sold in Fiscal 2026 due to increased tariffs, affecting gross profit by approximately 200 basis points[176] - The company plans to enhance consumer engagement through a digital strategy aimed at long-term growth[172] - The company is actively monitoring macroeconomic factors, including inflation and foreign currency fluctuations, that may impact financial results[177] Income and Tax - Interest expense, net increased by $6.9 million to $8.6 million during the three months ended September 30, 2025, primarily due to the issuance of Senior Notes due 2030[200] - Income tax expense increased by $28.1 million to $25.9 million during the three months ended September 30, 2025, with an effective tax rate of 345.9%[205]

Core Insights - Under Armour, Inc. (UAA) reported second-quarter fiscal 2026 results with both revenue and earnings exceeding Zacks Consensus Estimates, although both metrics decreased year over year [1][3][10] - Management noted positive brand momentum in North America, indicating progress in the company's turnaround strategy [1] Financial Performance - Adjusted earnings were four cents per share, surpassing the consensus estimate of three cents, but down from 30 cents per share in the prior year [3] - Net revenues reached $1,333.4 million, exceeding the consensus estimate of $1,308 million, but down 5% year over year, with a 6% decline on a currency-neutral basis [3] - Wholesale revenues fell 6.2% to $775.1 million, while direct-to-consumer revenues dipped 2.2% to $538.1 million [4] Revenue Breakdown - Apparel revenues decreased 1.1% to $936.5 million, exceeding the consensus estimate of $907 million [5] - Footwear revenues dropped 15.7% to $263.6 million, missing the consensus estimate of $267 million [5] - International revenues rose 2% to $551 million, with EMEA revenues increasing 12.2% to $317.7 million [6][7] Margin Analysis - Gross profit was $630.6 million, down 9.4% year over year, with gross margin contracting 250 basis points to 47.3% [8] - Adjusted selling, general and administrative expenses grew 9% to $577.2 million, excluding transformation costs [9] Future Outlook - For fiscal 2026, revenues are projected to decline 4-5%, with significant decreases expected in North America and Asia-Pacific [15] - Gross margin is anticipated to contract by 190-210 basis points due to elevated tariffs and unfavorable regional mix [15] - Operating income is forecasted between $19-$34 million, with adjusted operating income estimated at $90-$105 million [17]

Financial Data and Key Metrics Changes - Revenue declined 5% to $1.3 billion, slightly better than the outlook shared in August [30] - Gross margin declined 250 basis points year-over-year to 47.3%, primarily due to supply chain headwinds and unfavorable channel mix [33] - Adjusted operating income was $53 million, outperforming expectations [36] - Reported diluted loss per share was $0.04, with adjusted diluted earnings per share also at $0.04 [36] Business Line Data and Key Metrics Changes - North America revenue decreased 8%, primarily due to a decline in full-price wholesale and lower e-commerce sales [31] - EMEA revenue increased 12%, driven by full-price wholesale and strong growth in the DTC channel [31] - APAC revenue declined 14%, mainly driven by the wholesale business [31] - Apparel revenue declined 1%, while footwear revenue declined 16% due to challenging consumer demand [32] Market Data and Key Metrics Changes - Latin America revenue increased 15%, with strong growth across wholesale and DTC [31] - Direct-to-consumer revenue declined 2%, primarily due to an 8% decrease in e-commerce sales [32] - Licensing revenues increased 17%, driven by strength in the international business [32] Company Strategy and Development Direction - The company is focused on a turnaround strategy that emphasizes product innovation, storytelling, and brand positioning [7][28] - A streamlined assortment strategy has been implemented, cutting 25% of SKUs to enhance focus on key products [9] - The company aims to build on successful franchises and return to growth in upcoming seasons [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's potential and the importance of storytelling to connect with consumers [26][49] - The company anticipates a decline in full-year revenue of 4-5% for fiscal 2026, with expectations for stabilization in North America by fiscal 2027 [37][39] - Management highlighted the importance of maintaining high standards and building trust through performance [7] Other Important Information - A leadership transition is underway, with Reza Taghavi set to join as CFO in February 2026 [5] - The company is addressing structural challenges in APAC and aims to stabilize the business for growth in fiscal 2027 [24][25] Q&A Session Summary Question: What makes you confident that North America will see stabilization before the end of fiscal 2027? - Stabilization means getting the business to a healthy version, with a focus on structural elements, product elevation, and storytelling opportunities [44][45] Question: Can you elaborate on NeoLast and its significance? - NeoLast is a sustainable fiber that replaces Lycra, showcasing innovation in upcoming products [51][52] Question: What is being done to enhance the marketing voice for track and field? - The company is leveraging partnerships and focusing on authentic storytelling to enhance its presence in the running category [54][58] Question: Can you discuss the footwear business challenges? - The company is committed to footwear and is transitioning to a strategy that emphasizes aspiration and innovation rather than relying solely on brand heat [63]

分组1 - Under Armour reported quarterly earnings of $0.04 per share, exceeding the Zacks Consensus Estimate of $0.03 per share, compared to earnings of $0.3 per share a year ago, representing an earnings surprise of +33.33% [1] - The company posted revenues of $1.33 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.98%, although this is a decrease from year-ago revenues of $1.4 billion [2] - Under Armour has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates four times during the same period [2] 分组2 - The stock has underperformed, losing about 44.3% since the beginning of the year, while the S&P 500 has gained 15.6% [3] - The current consensus EPS estimate for the coming quarter is $0.05 on revenues of $1.33 billion, and for the current fiscal year, it is $0.06 on revenues of $4.94 billion [7] - The Zacks Industry Rank for Textile - Apparel is currently in the top 35% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Core Viewpoint - Under Armour reported a fiscal second-quarter loss due to declining sales in sportswear, indicating that this trend is expected to persist throughout the remainder of the fiscal year [1] Company Summary - Under Armour experienced a loss in the fiscal second quarter, attributed to a decrease in sportswear sales [1] - The company has issued a warning that the decline in sales is likely to continue for the rest of the fiscal year [1]

Revenue Performance - Revenue decreased 5 percent to $1.3 billion, with North American revenue declining 8 percent to $792 million and international revenue growing 2 percent to $551 million[3] - Net revenues for the three months ended September 30, 2025, were $1,333,380, a decrease of 4.7% compared to $1,399,023 in the same period of 2024[17] - North America segment revenues decreased by 8.3% to $791,502 for the three months ended September 30, 2025, compared to $863,345 in 2024[17] - EMEA segment revenues increased by 12.2% to $317,679 for the three months ended September 30, 2025, compared to $283,178 in 2024[17] - Total net revenue growth (decline) for the six months ended September 30, 2025, was (4.5)%, with a currency-neutral net revenue decline of (5.2)%[29] Profitability Metrics - Gross margin declined by 250 basis points to 47.3 percent, primarily due to supply chain headwinds and increased tariffs[3] - Gross profit for the three months ended September 30, 2025, was $630,584, representing 47.3% of net revenues, down from 49.8% in 2024[17] - Operating income was $17 million, while adjusted operating income, excluding transformation expenses and restructuring charges, was $53 million[3] - Projected operating income for fiscal 2026 is expected to range from $19 million to $34 million, with adjusted operating income forecasted between $90 million and $105 million[7] - Adjusted income from operations for the six months ended September 30, 2025, was $77,806 thousand, compared to $174,077 thousand for the same period in 2024[33] Net Income and Loss - Net loss was $19 million, with adjusted net income reported at $15 million[3] - Net income for the three months ended September 30, 2025, was a loss of $18,814, compared to a net income of $170,382 in 2024[17] - For the six months ended September 30, 2025, the net income was $(21,426) thousand, compared to $(135,044) thousand for the same period in 2024, indicating an improvement[27] - The company reported an adjusted net income of $23,854 thousand for the six months ended September 30, 2025, compared to $134,770 thousand for the same period in 2024[35] Expenses - Selling, general, and administrative (SG&A) expenses increased 12 percent to $582 million, with adjusted SG&A expenses rising 9 percent to $577 million[3] - The company reported a restructuring charge of $31,906 for the three months ended September 30, 2025, compared to $3,212 in 2024[17] - Adjusted selling, general and administrative expenses for the six months ended September 30, 2025, were $1,099,274 thousand, compared to $1,084,730 thousand for the same period in 2024[31] Cash Flow and Financial Position - Cash and cash equivalents totaled $396 million, with inventory declining 6 percent to $1.0 billion[6] - Total current assets increased to $2,943,783 as of September 30, 2025, from $2,329,097 as of March 31, 2025[25] - Total liabilities rose to $3,043,800 as of September 30, 2025, compared to $2,410,593 as of March 31, 2025[25] - Cash flows from operating activities for the six months ended September 30, 2025, were $(20,978) thousand, an improvement from $(168,409) thousand in the same period of 2024[27] - Net cash provided by financing activities for the six months ended September 30, 2025, was $560,462 thousand, compared to $(129,392) thousand for the same period in 2024[27] Shareholder Actions and Future Outlook - The company repurchased $25 million of its Class C common stock, retiring 5.2 million shares as part of a $500 million share buyback program[4] - Fiscal 2026 outlook projects revenue to decrease 4 to 5 percent, with anticipated declines in North America and Asia-Pacific, and a high-single-digit percentage increase in EMEA[7] - Expected gross margin decline of 190 to 210 basis points, mainly due to higher U.S. tariffs and unfavorable channel mix[7] - The outlook for the year ending March 31, 2026, estimates adjusted income from operations to be between $90 million and $105 million[40] - The adjusted diluted net income per share for the year ending March 31, 2026, is projected to be between $0.03 and $0.05[41] Operational Metrics - The company maintained a total of 447 doors as of September 30, 2025, compared to 446 doors as of September 30, 2024[43] - Direct-to-consumer revenues decreased by 2.2% to $538,136 for the three months ended September 30, 2025, compared to $550,336 in 2024[19]

Revenue Performance - Revenue decreased 5 percent to $1.3 billion, with North American revenue declining 8 percent to $792 million and international revenue growing 2 percent to $551 million[3] - Net revenues for the three months ended September 30, 2025, were $1,333,380, a decrease of 4.7% compared to $1,399,023 in the same period of 2024[17] - North America segment revenues decreased by 8.3% to $791,502 for the three months ended September 30, 2025, compared to $863,345 in 2024[17] - Direct-to-consumer revenues decreased by 2.2% to $538,136 for the three months ended September 30, 2025, compared to $550,336 in 2024[19] - Total net revenue growth (decline) for the six months ended September 30, 2025, was (4.5)%, with a currency-neutral net revenue decline of (5.2)%[29] Profitability and Margins - Gross margin declined by 250 basis points to 47.3 percent, primarily due to supply chain headwinds and increased tariffs[3] - Gross profit for the three months ended September 30, 2025, was $630,584, representing 47.3% of net revenues, down from 49.8% in 2024[17] - Operating income was $17 million, while adjusted operating income, excluding transformation expenses and restructuring charges, was $53 million[3] - Projected operating income for fiscal 2026 is expected to range from $19 million to $34 million, with adjusted operating income forecasted between $90 million and $105 million[7] - Adjusted income from operations for the six months ended September 30, 2025, was $77,806 thousand, compared to $174,077 thousand in 2024[33] Net Income and Loss - Net loss was $19 million, with adjusted net income reported at $15 million[3] - The company reported a net loss of $18,814 for the three months ended September 30, 2025, compared to a net income of $170,382 in 2024[17] - For the six months ended September 30, 2025, the net income was $(21,426) thousand, compared to $(135,044) thousand for the same period in 2024, indicating an improvement[27] - The company reported an adjusted net income of $23,854 thousand for the six months ended September 30, 2025, compared to $134,770 thousand in 2024[35] Expenses - Selling, general, and administrative (SG&A) expenses increased 12 percent to $582 million, with adjusted SG&A expenses rising 9 percent to $577 million[3] - The company experienced a significant increase in restructuring charges, which amounted to $31,906 for the three months ended September 30, 2025, compared to $3,212 in 2024[17] - Adjusted selling, general and administrative expenses for the six months ended September 30, 2025, were $1,099,274 thousand, compared to $1,084,730 thousand in 2024[31] Cash and Assets - Cash and cash equivalents totaled $396 million, with inventory declining 6 percent to $1.0 billion[6] - Total current assets increased to $2,943,783 as of September 30, 2025, from $2,329,097 as of March 31, 2025[25] - Total liabilities rose to $3,043,800 as of September 30, 2025, compared to $2,410,593 as of March 31, 2025[25] - Cash flows from operating activities for the six months ended September 30, 2025, were $(20,978) thousand, an improvement from $(168,409) thousand in 2024[27] - Net cash provided by financing activities for the six months ended September 30, 2025, was $560,462 thousand, compared to $(129,392) thousand in 2024[27] Stock and Shareholder Actions - Under Armour repurchased $25 million of its Class C common stock, retiring 5.2 million shares during the quarter[4] - The outlook for the year ending March 31, 2026, estimates adjusted income from operations to be between $90 million and $105 million[40] - The adjusted diluted net income per share for the year ending March 31, 2026, is projected to be between $0.03 and $0.05[41] - The company maintained a total of 447 doors as of September 30, 2025, compared to 446 doors in the previous year[43]

Core Viewpoint - Under Armour has projected annual revenue and profit figures that fall short of Wall Street expectations due to a decline in demand and increasing tariff costs [1] Group 1: Financial Performance - The company forecasts annual revenue and profit below Wall Street estimates [1] - The decline in demand is a significant factor affecting the company's financial outlook [1] - Rising tariff costs are contributing to the pressure on profitability [1]