Athletic apparel company Under Armour (NYSE: UAA) met Wall Street’s revenue expectations in Q1 CY2026, but sales were flat year on year at $1.17 billion. Its non-GAAP loss of $0.03 per share was $0.01 below analysts’ consensus estimates.
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Under Armour (UAA) Q1 CY2026 Highlights:
- Revenue: $1.17 billion vs analyst estimates of $1.17 billion (flat year on year, in line)
- Adjusted EPS: -$0.03 vs analyst estimates of -$0.02 ($0.01 miss)
- Adjusted EBITDA: $28.76 million vs analyst estimates of $39.78 million (2.5% margin, 27.7% miss)
- Adjusted EPS guidance for the upcoming financial year 2027 is $0.10 at the midpoint, missing analyst estimates by 55.9%
- Operating Margin: -2.9%, up from -6.1% in the same quarter last year
- Locations: 443 at quarter end, up from 441 in the same quarter last year
- Constant Currency Revenue fell 4.2% year on year (-10% in the same quarter last year)
- Market Capitalization: $2.12 billion
StockStory’s Take
Under Armour’s first quarter results were met with a sharp negative market reaction following flat revenues and a notable miss on adjusted EBITDA. Management attributed the underperformance to ongoing brand and product transformation efforts as well as lingering external pressures, such as tariffs and a cautious retail environment in North America. CEO Kevin Plank acknowledged, “We are not improving our bottom line fast enough,” highlighting the company’s focus on enhancing the quality of sales by exiting less profitable segments and reducing product complexity. The quarter was characterized by deliberate moves to prioritize margin improvement and operational discipline over pure sales growth.
Looking ahead, Under Armour’s outlook is shaped by its strategy to stabilize revenue while driving gross margin recovery through product premiumization and a more focused marketing approach. CFO Reza Taleghani pointed to ongoing investments in category management and a more curated assortment, stating that the company is “aligning our financial framework tightly with our strategy, focusing on improving the quality of revenue, expanding margins and driving more efficient capital allocation.” Management cautioned that while modest revenue declines may persist, the emphasis will be on better inventory quality, higher price points, and more effective marketing to set the stage for a more profitable business in the coming year.
Key Insights from Management’s Remarks
Management attributed the quarter’s performance to deliberate product and market resets, ongoing cost controls, and a renewed focus on brand elevation, with mixed progress across regions and channels.
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North America reset ongoing: The company continued to experience softness in North America, particularly in wholesale, as it scaled back lower-margin and less strategic segments to focus on core sports and premium products. Management described Q1 as a deliberate stabilization period, aiming to improve sell-through and partner confidence even at the expense of volume.
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Product simplification drive: Under Armour reduced its product offering by 25% over two years, with further SKU reductions planned. Newly appointed Chief Merchandising Officer Kara is tasked with focusing the assortment on top-performing items and streamlining the supply chain for healthier margins.
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Elevated marketing investment: Management outlined a shift in marketing strategy, channeling spending into product-led storytelling and targeted activations. Approximately $30 million in incremental marketing is being allocated to build brand awareness, especially around new launches like the Velocity Lead 3 and Bounce T, with the goal of improving full-price sell-through and consumer engagement.
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Margin improvement through premiumization: The company is emphasizing premium apparel and footwear, focusing on fewer, higher-quality products at elevated price points. This approach is intended to improve gross margins and align with consumer demand for versatile, high-performance items.
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International variation: EMEA provided stability with growth in both wholesale and direct-to-consumer channels, while APAC focused on reducing discounting and rebalancing toward more brand-driven marketing. Management highlighted that Latin America delivered double-digit growth, but overall international momentum was offset by continued North America headwinds.
Drivers of Future Performance
Under Armour’s near-term outlook is defined by the continued focus on revenue quality, gross margin improvement, and strategic marketing investments amid a challenging retail landscape.
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Margin expansion initiatives: Management expects gross margin to expand, supported by a one-time tariff refund, ongoing price elevation, and improved product and channel mix. However, external pressures such as tariffs and supply chain headwinds remain risks, with only partial mitigation from these actions.
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Marketing and product strategy: An additional $30 million in marketing spend will support launches of new premium products and reinforce Under Armour’s performance brand image. The company expects these efforts to improve consumer perception and drive higher average selling prices, though traffic and conversion rates will be closely monitored.
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International execution and wholesale partnerships: Growth in EMEA and stabilization in APAC, particularly China, are expected to offset lingering North America challenges. Management is focused on deepening wholesale partnerships and exploring collaborations to elevate the brand, but warns that the global consumer environment remains unpredictable.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be watching (1) signs of improved sell-through and inventory quality in North America, (2) the effectiveness of targeted marketing investments in driving higher full-price sales and consumer engagement, and (3) continued stabilization or growth in international markets, particularly EMEA and China. Execution on new product launches and ongoing SKU simplification will also be critical milestones.
Under Armour currently trades at $5.02, down from $6.02 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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