Q1 FY2027
Filed Aug 7, 2026UNDER ARMOUR REPORTS FIRST QUARTER FISCAL 2027 RESULTS; MAINTAINS FULL-YEAR PROFITABILITY OUTLOOK WHILE UPDATING REVENUE EXPECTATIONS
Revenue decreased 3 percent, with North America, DTC, footwear, and eCommerce declines, while the company lowered its fiscal 2027 revenue outlook. Gross margin increased 590 basis points to 54.1 percent and the company maintained its operating-income and adjusted operating-income outlooks.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $1.1 billion | – | decreased 3 percent |
| Revenue, constant currencynon-GAAP | $1.1 billion | – | down 4 percent constant currency |
| Gross marginGAAP | 54.1 percent | – | increased 590 basis points |
| Selling, general and administrative expensesGAAP | $543 million | – | increased 2 percent |
| Adjusted selling, general and administrative expensesnon-GAAP | $541 million | – | increased 4 percent |
| Restructuring chargesGAAP | $4 million | – | – |
| Transformation-related SG&A expensesGAAP | $2 million | – | – |
| Operating incomeGAAP | $47 million | – | – |
| Adjusted operating incomenon-GAAP | $52 million | – | – |
| Net incomeGAAP | $1 million | – | – |
| Adjusted net incomenon-GAAP | $21 million | – | – |
| Diluted earnings per shareGAAP | $0.00 | – | – |
| Adjusted diluted earnings per sharenon-GAAP | $0.05 | – | – |
| InventoryGAAP | $1.1 billion | – | decreased 3 percent |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| North AmericaSofter demand in North America was cited as a driver of the revised fiscal 2027 outlook. | $610 million | – | declined 9 percent |
| InternationalRevenue increased 2 percent constant currency. | $490 million | – | increased 5 percent |
| WholesaleNot stated. | $638 million | – | decreased 2 percent |
| Direct-to-consumer (DTC)Owned-and-operated store revenue declined 3 percent and eCommerce revenue decreased 12 percent. | $437 million | – | decreased 6 percent |
| ApparelNot stated. | $734 million | – | decreased 2 percent |
| FootwearNot stated. | $245 million | – | declined 8 percent |
| AccessoriesNot stated. | $96 million | – | decreased 4 percent |
fiscal 2027 outlook
- Revenueexpected to decline at a mid-single-digit percentage rate
- Gross marginexpected to increase 220 to 270 basis points versus the prior year's gross margin
- Operating expensesSG&A expense, including transformation expenses related to the Fiscal 2025 Restructuring Plan, is now expected to decrease at a high-single-digit rate; Adjusted SG&A is now expected to decrease at a low-single-digit rate
- NoteNorth America is expected to decline at a mid-single-digit percent rate.
- NoteAsia-Pacific is expected to decline at a low-single-digit rate.
- NoteEMEA is expected to decline at a low-single-digit rate.
- NoteOperating Income is expected to be in the range of $96 million to $116 million.
- NoteAdjusted Operating Income is expected to be $140 million to $160 million.
- NoteDiluted Loss Per Share is expected to range from $0.01 to $0.05.
- NoteAdjusted Diluted Earnings Per Share is expected to be $0.08 to $0.12.
- NoteApproximately 150 basis points of gross-margin improvement is due to the recovery of IEEPA-related tariff costs expensed in fiscal 2026 realized in the first quarter.
- NoteThe outlook includes an approximate $70 million benefit from the realization of refunds from prior-year IEEPA tariff expenses and approximately $35 million in headwinds related to the conflict in the Middle East.
What drove it
- Gross margin increased primarily due to refunds received associated with the recovery of IEEPA tariff costs expensed in fiscal 2026.
- Gross-margin improvement was partially offset by unfavorable foreign exchange impacts, unfavorable regional and channel mix, and pricing headwinds.
- SG&A increased primarily due to targeted investments to strengthen the brand and continued disciplined operating expense management.
- The revised revenue outlook is driven by softer demand, particularly in North America and Asia-Pacific.
- The company expects gross-margin expansion excluding the IEEPA benefit from pricing actions, lower discounting, and a more favorable channel mix.
- The company expects to substantially offset the impact of lower revenue through disciplined expense management and a more agile and disciplined operating model.
Concerns
- Revenue decreased 3 percent, or down 4 percent constant currency.
- North America revenue declined 9 percent to $610 million.
- Asia-Pacific revenue decreased 7 percent, or down 10 percent constant currency.
- DTC revenue decreased 6 percent to $437 million, including a 12 percent decrease in eCommerce revenue.
- Footwear revenue declined 8 percent to $245 million.
- Fiscal 2027 revenue is now expected to decline at a mid-single-digit percentage rate, compared with the prior outlook of a slight decline.
- The outlook includes approximately $35 million in headwinds related to the conflict in the Middle East.
- Gross margin faced unfavorable foreign exchange impacts, unfavorable regional and channel mix, and pricing headwinds.
What to watch
- Whether North America revenue, expected to decline at a mid-single-digit percent rate in fiscal 2027, stabilizes.
- Whether Asia-Pacific and EMEA, each expected to decline at a low-single-digit rate, meet the updated outlook.
- Realization of the approximate $70 million benefit from refunds from prior-year IEEPA tariff expenses.
- Execution against expected SG&A expense decreases while continuing strategic investments.
- Completion of the Fiscal 2025 Restructuring Plan, which is expected to be substantially complete by December 31, 2026.
- Delivery of fiscal 2027 operating income of $96 million to $116 million and adjusted operating income of $140 million to $160 million.
Balance sheet and cash flow
- Inventory decreased 3 percent to $1.1 billion.
- Cash and cash equivalents totaled $396 million at quarter-end.
- $200 million of borrowings were outstanding under its $1.1 billion revolving credit facility.
- On June 15 upon maturity, funds from the company's restricted investments were used to settle all remaining principal and interest payments to holders of the Senior Notes due 2026.
- To date, the company has incurred $266 million in total restructuring and transformation costs, including $116 million in cash and $150 million in non-cash charges.
- Total program costs under the plan are anticipated to be approximately $305 million.
Analysis
First-quarter fiscal 2027 revenue decreased 3 percent to $1.1 billion, or down 4 percent constant currency. Demand was uneven across the business. North America revenue declined 9 percent to $610 million, while international revenue increased 5 percent to $490 million. Within international markets, EMEA increased 12 percent, Latin America increased 8 percent, and Asia-Pacific decreased 7 percent. Wholesale decreased 2 percent to $638 million and DTC decreased 6 percent to $437 million.
Product and digital trends remain the principal weak points in the reported mix. Apparel revenue decreased 2 percent to $734 million, footwear declined 8 percent to $245 million, and accessories decreased 4 percent to $96 million. Within DTC, owned-and-operated store revenue declined 3 percent and eCommerce revenue decreased 12 percent. eCommerce represented 29 percent of total DTC revenue for the quarter.
Profitability improved despite the sales decline. Gross margin increased 590 basis points to 54.1 percent, primarily from refunds associated with the recovery of IEEPA tariff costs expensed in fiscal 2026. The release identifies unfavorable foreign exchange impacts, unfavorable regional and channel mix, and pricing headwinds as partial offsets. SG&A increased 2 percent to $543 million, while adjusted SG&A increased 4 percent to $541 million. Operating income was $47 million and adjusted operating income was $52 million; net income was $1 million and adjusted net income was $21 million.
Liquidity included $396 million of cash and cash equivalents and $200 million of revolving-credit-facility borrowings outstanding under the $1.1 billion facility. Inventory decreased 3 percent to $1.1 billion. The company recorded $4 million of restructuring charges and $2 million of transformation-related SG&A expenses during the quarter. It has incurred $266 million in total restructuring and transformation costs to date and expects the plan to be substantially complete by December 31, 2026.
Management lowered its fiscal 2027 revenue outlook to a mid-single-digit percentage decline from a prior slight decline, citing softer demand particularly in North America and Asia-Pacific. It maintained operating-income guidance of $96 million to $116 million and adjusted operating-income guidance of $140 million to $160 million. Gross margin is still expected to increase 220 to 270 basis points, with approximately 150 basis points from IEEPA-related tariff-cost recovery realized in the first quarter. The outlook relies on expense actions to offset lower revenue and includes approximately $35 million of Middle East conflict headwinds.
Management, verbatim
As we navigate a challenging consumer demand environment, we continue to make progress in building a more focused Under Armour, despite updating our full-year revenue outlook.
Kevin Plank, Under Armour President and CEO
By simplifying the business, we are operating with greater discipline and better positioned to protect profitability, while still investing in a sharper product portfolio through clearer storytelling with the goal of driving a more premium Under Armour that will consistently earn demand at full price.”
Kevin Plank, Under Armour President and CEO
Not in the filing
stated, not guessed- Prior-year dollar amounts for revenue, geographic revenue, channel revenue, category revenue, gross margin, SG&A, operating income, net income, EPS, and inventory were not provided on their respective line items in the supplied text.
- Prior-quarter comparisons for reported metrics were not provided.
- Operating cash flow was not provided.
- Free cash flow was not provided.
- Capital-return amounts, including share repurchases and dividends, were not provided.
- Tax rate was not provided.
- Revenue amounts for EMEA, Asia-Pacific, Latin America, owned-and-operated stores, and eCommerce were not provided.
- A separately provided previous outlook was not supplied; therefore, no actual-versus-prior-guidance comparison was made.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.