Core Insights - Under Armour's growth engine has not fully restarted as the restructuring plan approaches its conclusion [1] - The company reported a revenue decline of 5% year-over-year for Q2 of FY2026, totaling $1.3 billion [2] - Management emphasizes stabilizing the business foundation and planning for sustainable growth beyond FY2027 [7] Financial Performance - Revenue for Q2 FY2026 was $1.3 billion, down 5% year-over-year [2] - Gross margin decreased by 250 basis points to 47.3% due to tariff pressures and supply chain fluctuations [2] - Net loss reached $19 million, with adjusted net income at $15 million [2] Market Performance - North American revenue fell by 8% to $790 million, impacted by a contraction in full-price wholesale and weak e-commerce sales [3] - The Asia-Pacific market, including China, saw revenue decline by 14% to $179 million [3][4] - Management noted that the reported data does not fully reflect the actual improvements in the Asia-Pacific market [4] Strategic Initiatives - Under Armour plans to test a new digital retail store concept starting in Q4, aiming to create immersive shopping experiences [5] - The company is focusing on stabilizing its core business and has set a goal to achieve business stabilization by FY2027 [6][7] - A significant restructuring plan initiated in June 2024 is nearing completion, with costs expected between $70 million and $90 million [8] Future Outlook - For FY2026, Under Armour anticipates a revenue decline of 4% to 5%, an improvement from the 9% decline in FY2025 [6] - North America and Asia-Pacific are expected to experience high single-digit declines, while EMEA is projected to see high single-digit growth [6] Strategic Focus on Asia - Under Armour is placing strategic emphasis on the Asia-Pacific market, particularly China, which contributes nearly half of the region's revenue [9] - Recent partnerships and initiatives in China include collaborations with national rugby teams and the launch of the CURRY brand events [9][10] - The appointment of Carol Chen as Vice President and General Manager for China is aimed at enhancing market strategy and operations [10]

Core Viewpoint - Under Armour's performance continues to decline, with a 9% revenue drop to $5.2 billion and a net loss of $201 million for the fiscal year 2025, despite management's positive outlook on restructuring efforts [2][3]. Financial Performance - For fiscal year 2025, Under Armour reported a revenue decrease of 9% to $5.2 billion and a net loss of $201 million [2]. - In Q4, revenue fell 11% year-over-year to $1.2 billion, with a net loss of $67 million [2]. - In fiscal year 2024, revenue declined 3% to $5.7 billion, with a net income of $232 million, down $142 million from the previous year [2]. Restructuring and Strategic Initiatives - Under Armour initiated a turnaround plan in June 2024, led by returning CEO Kevin Plank, focusing on eliminating excessive discounting and enhancing product exclusivity for members [3]. - The plan emphasizes a return to the core men's apparel business and the revival of the Flow technology with the Curry shoe series [3]. - A key strategy involves focusing on the Asia-Pacific market, particularly China, which is seen as a growth driver [3]. Market Position and Competition - Under Armour has increased its store count and localized marketing efforts in China, including a series of fan events featuring Stephen Curry [3]. - The company plans to invest more in marketing within the Asia-Pacific region, recognizing China's significant contribution to regional revenue [3]. - Despite the restructuring efforts, Under Armour faces stiff competition from both international brands like Nike and Adidas and domestic brands such as Anta and Li Ning in the Chinese market [4]. Future Outlook - Under Armour forecasts a revenue decline of 4% to 5% for Q1 of fiscal year 2026 compared to the same period in fiscal year 2025 [4].