Key Highlights

  • UA shares fell 3.26% pre-market to $5.20 after closing at $5.38 on Nov. 5.
  • Fiscal Q2 Revenue decreased 7% to $1.2 billion; North America fell 7% to $737 million.
  • Operating income was $15 million; adjusted Operating Income was $25 million.
  • Fiscal 2027 gross Margin is now expected to increase 170 to 220 basis points.

Under Armour (NYSE:UA) shares were down 3.26% pre-market at $5.20, compared with a Nov. 5 close of $5.38, after the company reported second-quarter fiscal 2027 results for the quarter ended September 30, 2026 and updated its fiscal 2027 outlook. Revenue decreased 7% to $1.2 billion, and the company reported a net loss of $0.4 million.

Under Armour is a Baltimore-based performance Brand that designs and sells apparel, footwear and accessories.

Revenue Falls 7% With Footwear Down 11% and Direct-to-Consumer Down 8%

North America revenue declined 7% to $737 million, while international revenue decreased 7% to $509 million, down 9% in constant currency.

Wholesale revenue decreased 6% to $725 million and direct-to-consumer revenue decreased 8% to $494 million. By category, apparel revenue decreased 6% to $880 million, footwear declined 11% to $234 million and accessories decreased 7% to $105 million.

Gross margin decreased 30 basis points to 47.0%, primarily due to unfavorable foreign currency, channel and regional mix, and pricing, partially offset by Supply chain benefits and favorable product mix. SG&A expenses decreased 4% to $557 million.

Fiscal 2027 Outlook Lowers the Gross Margin Improvement Range to 170 to 220 Basis Points

Under Armour still expects fiscal 2027 revenue to decline at a mid-single-digit percentage rate. Gross margin is now expected to increase 170 to 220 basis points, versus a prior expectation of 220 to 270 basis points, due largely to higher fuel and freight costs, planned inventory management actions and foreign exchange headwinds.

Operating income is now expected to be $99 million to $119 million, versus a prior range of $96 million to $116 million. Adjusted operating income is still expected at $140 million to $160 million, including an approximate $70 million benefit from refunds of prior-year IEEPA Tariff expenses, partly offset by Middle East conflict headwinds of approximately $45 million (previously $35 million). Adjusted diluted EPS is still expected at $0.08 to $0.12.

For the fiscal third quarter ending December 31, 2026, the company expects adjusted operating income between a loss of $5 million and income of $5 million, and an adjusted diluted loss per share of $0.03 to $0.01.

Restructuring Plan Costs Reach $280 Million, With Completion Expected by December 31, 2026

In the second quarter, Under Armour recorded $11 million in restructuring charges and $2 million in transformation-related SG&A expenses, for a total of $13 million under its Fiscal 2025 Restructuring Plan. To date, the company has incurred $280 million in total restructuring and transformation costs, including $121 million in cash and $159 million in non-cash charges. Total program costs are anticipated to be approximately $305 million.

Second-quarter operating income was $15 million, or $25 million on an adjusted basis. Cash and cash equivalents totaled $285 million, with $190 million of borrowings outstanding under the company's $1.1 billion revolving Credit facility. Shares have a forward P/E of 45.02 and a 52-week range of $3.95 to $7.91.

Next Up: Fiscal Third-Quarter Guidance and Completion of the Restructuring Plan

Under Armour shares are lower pre-market after fiscal second-quarter revenue declined 7% to $1.2 billion and the fiscal 2027 gross margin outlook was updated. Attention turns to the fiscal third-quarter guidance for an adjusted diluted loss per share of $0.03 to $0.01 and the restructuring plan expected to be substantially complete by December 31, 2026.