Under Armour reported a net loss of $18.8 million for the quarter ended September 30, 2025, with diluted earnings per share of $‑0.04. Adjusted earnings per share rose to $0.04, beating the consensus estimate of $0.02. Total revenue fell 5% to $1.33 billion, a decline that outpaced the 4.7% figure originally reported. Gross margin contracted to 47.3%, a 250‑basis‑point drop from the 47.9% margin reported a year earlier, reflecting the impact of higher U.S. tariffs and a less favorable channel and regional mix.
The revenue decline was driven by a 16% drop in footwear sales, which fell to $264 million, and a 3% decline in accessories to $113 million. Apparel revenue slipped 1% to $936 million. The footwear segment’s weakness was highlighted by CFO David Bergman, who noted that the decline was “unacceptable” and a key focus for the company’s transformation plan. The apparel and accessories segments, while modestly weaker, helped cushion the overall revenue impact.
Gross margin compression was largely attributable to supply‑chain headwinds, including a 275‑basis‑point increase in costs from higher U.S. tariffs, and a shift toward lower‑margin product mixes. Bergman explained that the margin decline was “primarily due to 275 basis points of supply chain headwinds, primarily from higher U.S. tariffs.” The company’s strategic reset has focused on streamlining SKUs and improving pricing discipline, but the tariff‑related cost pressure has offset those gains in the short term.
Despite the margin squeeze, the company’s adjusted EPS beat expectations because of disciplined cost management and the elimination of one‑time restructuring charges. The $103 million in restructuring and impairment charges, combined with an additional $44 million in other transformational expenses, were fully accounted for in the quarter, leaving the core operating performance to reflect a tighter cost base. The adjusted EPS beat of $0.02 (or 100% over consensus) underscores the effectiveness of the company’s cost‑control initiatives amid a challenging market environment.
Looking ahead, Under Armour guided for a 4%–5% decline in full‑year revenue and an adjusted operating income of $90 million to $105 million, a significant revision from the previously projected $185 million to $195 million. The guidance reflects management’s concern about ongoing tariff impacts, the continued weakness in the footwear category, and a cautious outlook for North American and Asia‑Pacific markets. The company remains committed to its transformation plan, which is estimated to cost up to $160 million and aims to strengthen brand positioning and operational efficiency.
CEO Kevin Plank emphasized that the company is “sharpening Under Armour into a brand where sports credibility, innovation and style meet operational discipline.” He highlighted progress in brand momentum in North America and reiterated confidence in the turnaround strategy, while acknowledging that the footwear business remains a critical area for improvement. The company’s focus on product innovation, streamlined SKUs, and marketing activations signals a long‑term commitment to rebuilding the brand and improving profitability.
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