Under Armour’s (NYSE:UAA) Q3 CY2026 sales top estimates but stock drops 12.7%

Under Armour (UAA) reported Q2 2027 revenue of $1.2B, down 7%, but met expectations. Adjusted operating income exceeded forecasts. Gross margin fell 30 bps to 47%. Inventory rose 4% YoY to $1.1B. The company lowered its fiscal 2027 gross margin outlook by 50 bps. North America revenue is expected to decline 8-9% in Q3. UAA is simplifying its product line, investing in AI, and transitioning youth apparel to a licensing model.

Ralph Lauren (RL) and Tapestry (TPR) reported strong Q2 sales growth of 9% and 12% respectively, driven by high-end consumer resilience. Both CEOs expressed confidence in long-term strategies. Capri Holdings (CPRI) and Under Armour (UAA) aim to follow similar paths but face challenges, with sales declines of 5.5% and 7% respectively. Analysts debate brands' pricing power amid inflation.

Under Armour CEO Kevin Plank outlined plans to grow the company's $1B footwear business, citing improvements in team sports and running categories. Q2 revenue fell 7% to $1.2B, better than expected, but footwear sales dropped 11%. Analysts question if Under Armour can translate innovation into broader demand. Plank emphasized focusing on athlete needs and improving execution.

Under Armour (UAA, UA) shares fell sharply after the company warned that fiscal 2027 profit margins would be lower due to rising costs and geopolitical disruptions. Despite better-than-expected Q2 results, revenue declined 7% to $1.24B, and gross margin narrowed. The company maintained its adjusted earnings and operating income guidance but raised the estimated financial impact of the Middle East conflict to $45M.

Under Armour reported a $400,000 loss on $1.2B revenue for Q3, in line with expectations. Sales declined in all regions, with North America down 7%. The company plans to cut 50% of its products this decade. Shares opened lower at $5.35. Under Armour expects mid-single-digit revenue decline for the fiscal year, with gross margins pressured by higher costs.

Under Armour (UAA) shares fell after guiding to a steeper-than-expected Q3 sales decline, despite a Q2 revenue beat. The company expects Q3 revenue to drop 8-9% and posted an adjusted loss, while full-year gross margin expansion was reduced. Q2 revenue was $1.242B, down 6.9% YoY, with adjusted operating income falling to $24.9M. Management raised full-year GAAP EPS guidance but kept adjusted EPS and operating income guidance unchanged.