“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,” said Kevin Plank, president and chief executive officer (CEO) of Under Armour.
American sportswear company Under Armour reported a 3 per cent YoY decline in Q1 FY27 revenue to $1.1 billion, as weaker North American and Asian demand weighed on sales.
The gross margin expanded 590 bps to 54.1 per cent, while net income stood at $1 million.
The company lowered its FY27 revenue outlook to a mid-single-digit decline amid softer demand globally.
“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,” Plank added.
North America revenue declined 9 per cent YoY to $610 million during the quarter, while international revenue increased 5 per cent to $490 million, or 2 per cent on a constant-currency basis.
Within international markets, Europe, the Middle East and Africa (EMEA) delivered the strongest performance, with revenue rising 12 per cent, or 10 per cent in constant currency. Latin America revenue increased 8 per cent, though growth was limited to 1 per cent in constant currency. Asia-Pacific revenue fell 7 per cent, or 10 per cent on a constant-currency basis, Under Armour said in a press release.
Sales decline across channels and product categories
Revenue declined across both of Under Armour’s major sales channels. Wholesale revenue decreased 2 per cent to $638 million, while direct-to-consumer (DTC) revenue fell 6 per cent to $437 million.
Within DTC, revenue from owned-and-operated stores decreased 3 per cent, while e-commerce revenue dropped 12 per cent. E-commerce accounted for 29 per cent of total DTC revenue during the quarter.
All three major product categories also registered lower revenue. Apparel, Under Armour’s largest category, saw revenue decline 2 per cent to $734 million. Footwear revenue dropped 8 per cent to $245 million, while accessories revenue decreased 4 per cent to $96 million.
Despite weaker sales, the company’s gross margin expanded sharply by 590 basis points (bps) to 54.1 per cent. The improvement was primarily attributable to refunds received in connection with the recovery of International Emergency Economic Powers Act (IEEPA) tariff costs that had been expensed in FY26.
Selling, general and administrative (SG&A) expenses increased 2 per cent to $543 million, primarily reflecting targeted investments aimed at strengthening the Under Armour brand alongside continued operating expense management.
The net income was $1 million, while adjusted net income came in at $21 million after excluding transformation and restructuring charges. Diluted earnings per share (EPS) were $0.00, compared with adjusted diluted EPS of $0.05.
Under Armour cuts FY27 revenue forecast
Against the backdrop of softer demand, Under Armour has revised down its FY27 revenue forecast. Revenue is now expected to decline at a mid-single-digit percentage rate compared with FY26, against its previous expectation of a slight decline.
North America revenue is now forecast to decline at a mid-single-digit rate, compared with the previous projection of a low-single-digit decline.
Under Armour also expects low-single-digit revenue declines in both Asia-Pacific and EMEA. Previously, the company had forecast low-single-digit increases in both regions.
The gross margin is still projected to improve by 220-270 bps compared with FY26. Around 150 bps of the expected improvement is attributable to the recovery of IEEPA-related tariff expenses recognised during the first quarter.
Under Armour maintained its FY27 operating income forecast at $96-116 million. Adjusted operating income, excluding expected transformation expenses and restructuring charges, is still projected at $140-160 million.
Under Armour now expects a diluted loss per share of $0.01-0.05 for FY27, compared with its previous forecast ranging from breakeven to a loss of $0.04 per share.
Its adjusted diluted EPS forecast, excluding anticipated transformation expenses and restructuring charges, remains unchanged at $0.08-0.12.
Fibre2Fashion News Desk (SG)
