Under Armour Sales Fall 7% as Restructuring Nears Completion

Under Armour's second-quarter revenue fell 7 percent to $1.2 billion, and investors sent shares down 11 percent to $4.78 in premarket trading Friday. The quarter ended September 30 marked another chapter in founder Kevin Plank's protracted reset of the business.

"We delivered against our revenue expectation and exceeded our operating income outlook," Plank said in a statement. "As we progress in this transformation, we are driving greater efficiency across our business, sharpening our product offering and amplifying global marketing to strengthen our brand and improve financial performance."

The market discounted the message. Wall Street had braced for worse on the top line, with analysts expecting an 8.3 percent decline, according to Yahoo. The actual 7 percent contraction beat that bar, yet the stock still sold off.

How did the categories perform?

Declines spread evenly between North America and the international division. Every product group lost ground.

• Apparel revenue fell 6 percent to $880 million
• Footwear declined 11 percent to $234 million
• Accessories dropped 7 percent to $105 million

Footwear remains the weakest link. An 11 percent decline in a category rivals treat as a growth engine underlines how far the brand sits from a balanced product portfolio.

The loss picture improved sharply. Net losses narrowed to $425,000 from $18.8 million a year earlier. On an adjusted basis, the company hit break even.

What does the restructuring cost?

The reset carries a heavy price tag. Under Armour has logged $280 million in restructuring costs so far and expects the total to approach $305 million when the efforts wrap up at the end of the year.

For the full fiscal year, revenues are still slated to fall by midsingle digits. That guidance signals at least two more quarters of contraction before any recovery takes hold.

Why did the margin outlook change?

The company trimmed its gross margin forecast. It now expects an increase of 170 to 220 basis points, down from the previously projected 220 to 270 basis points.

About 150 basis points of the expected improvement come from tariff refunds rather than underlying operations. Stripping that benefit out, Under Armour said it "continues to expect gross margin expansion driven by pricing actions, lower discounting and a more favorable channel and product mix, partially offset by increased supply chain headwinds related to the ongoing conflict in the Middle East and unfavorable foreign exchange impacts."

For sourcing teams, that sentence carries the operational weight. The Middle East conflict is raising supply chain costs, and unfavorable foreign exchange is eating into whatever pricing discipline the brand achieves. Discounting is falling, but freight and currency pressures now offset part of that gain.

What happens to profit guidance?

Adjusted operating profits remain pegged at $140 million to $160 million, with $70 million of that range coming from tariff refunds. Nearly half the operating profit outlook depends on a one-time customs recovery rather than trading performance.

The earnings-per-share forecast improved slightly. Under Armour now guides to a range from a loss of 2 cents to earnings of 2 cents, an improvement from the prior view of losses between 1 cent and 5 cents.

The company expects to close out its restructuring program by the end of the year, giving Plank a cleaner baseline entering fiscal 2026.