Under Armour Q1 Earnings Call Highlights

Under Armour Q1 Earnings Call Highlights

Under Armour cut its fiscal 2027 revenue outlook to a mid-single-digit decline after first-quarter sales fell 3% to $1.1 billion, reflecting weaker consumer demand in North America and Asia-Pacific and heavier retail promotions. Despite lower sales, adjusted operating income reached $52 million, exceeding guidance, while gross margin expanded 590 basis points to 54.1%. The company maintained its full-year adjusted operating income forecast of $140 million to $160 million and expects inventory to remain controlled. Management is prioritizing margin protection over discounted volume through a simplified product assortment, full-price selling, tighter marketing and inventory discipline. Under Armour plans to reduce SKUs further and focus investment on key franchises such as HeatGear, Velociti and StealthForm.

Under Armour NYSE: UA . lowered its fiscal 2027 revenue outlook after first-quarter sales declined 3% to $1.1 billion, citing softer consumer demand in North America and Asia-Pacific and a more promotional retail environment. The company maintained its full-year adjusted operating income forecast of $140 million to $160 million, pointing to tighter cost management and a more disciplined operating model. President and CEO Kevin Plank said the company does not intend to pursue lower-quality volume through heavier discounting. Instead, Under Armour is emphasizing product-line simplification, full-price selling, inventory control and more focused marketing tied to product launches and athlete storytelling.

Regional and Channel Performance North America revenue fell 9% in the first quarter, driven by softer spring and summer wholesale orders as well as traffic pressures in e-commerce and company-operated stores. Direct-to-consumer revenue declined 6%, including a 12% drop in e-commerce and a 3% decrease in owned and operated retail stores. Chief Financial Officer Reza Taleghani said traffic challenges intensified as the quarter progressed, particularly in North America and China. The company said it saw consumer demand weaken beginning in late May, while competitors’ inventory clearances contributed to increased promotional activity in the market. Asia-Pacific revenue declined 7%, or 10% on a constant-currency basis. Results in China and Southeast Asia were weaker than anticipated. In China, the company also cited stock-outs in key styles and sizes and demand cannibalization from licensing partners that discounted aggressively. EMEA revenue increased 12%, or 10% on a constant-currency basis, supported by distributor business growth. However, Under Armour said it expects fiscal-year EMEA revenue to decline at a low-single-digit rate amid a competitive and promotional environment. Latin America revenue rose 8%, aided by foreign exchange, while constant-currency revenue increased 1%. By category, apparel revenue declined 2%, footwear sales fell 8%, and accessories revenue decreased 4%. Sportswear was an area of growth, while outdoor and golf partially offset footwear declines. The company’s running business was flat during the quarter.

Profitability Exceeds Outlook Despite lower sales, adjusted operating income reached $52 million, above Under Armour’s prior outlook of $30 million to $40 million.