Under Armour Earnings Lift Guidance
Under Armour earnings showed a surprise profit and guidance raise while tariffs, restructuring, legal costs pressured GAAP results, keeping shares volatile.
KEY TAKEAWAYS
- Posted Q3 adjusted EPS of $0.09 and $1.33 billion revenue; raised fiscal-2026 adjusted EPS to $0.10-$0.11.
- GAAP net loss totaled $430.8 million after $75 million restructuring and a $98.5 million litigation reserve.
- Gross margin shrank 310 basis points to 44.4% amid higher tariffs, pricing pressure and mix.
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Under Armour Inc. (UAA, UA) reported a surprise Q3 profit and revenue that exceeded estimates on Feb. 6, 2026, prompting the company to raise full-year adjusted EPS guidance despite restructuring and litigation costs and tariff-driven margin pressure that pushed GAAP results into a loss.
Results and Outlook
For the quarter ended Dec. 31, 2025, Under Armour posted adjusted EPS of $0.09 and revenue of $1.33 billion. Adjusted net income was $36.9 million, while GAAP results showed a net loss of $430.8 million, or $(1.01) per share. Gross margin narrowed 310 basis points to 44.4%, the company said in a press release.
Management raised fiscal 2026 adjusted diluted EPS guidance to $0.10–$0.11 and expects full-year revenue to decline about 4% compared with 2025. The company projected GAAP diluted EPS of $(1.24)–$(1.25), a full-year gross-margin decline of roughly 190 basis points, and a low-double-digit percentage reduction in selling, general, and administrative expenses (SG&A). Adjusted operating income is forecast near $110 million. Management said it will continue to absorb restructuring and litigation-related costs.
Charges and Margin Pressure
The GAAP loss reflected several one-time charges recorded in the quarter: a $75 million restructuring charge, a $98.5 million litigation reserve related to a Directors & Officers insurance claim appeal loss, and a $247 million tax valuation allowance. The company’s restructuring plan totals $255 million, including $107 million in cash and $148 million non-cash. Through the third quarter, $224 million had been incurred, with about $31 million expected by year-end. These charges, combined with higher costs, pushed results into GAAP loss territory.
Management attributed the quarter’s margin compression to higher U.S. tariffs, pricing pressure, and an unfavorable product and channel mix.
Regional and Product Trends
Under Armour’s Q3 revenue in North America was $756.7 million, down 10.3% year over year. International revenue rose 3.4% to $577 million, with Europe, the Middle East, and Africa (EMEA) up 6.0%, Asia-Pacific down 5.1%, and Latin America up 19.7%.
By product, apparel sales totaled $934 million, down 3.3% year over year; footwear revenue fell 12.0% to $265.1 million; and accessories declined 2.5% to $107.7 million. Reporting around the quarter noted that efforts to simplify the product assortment helped stabilize demand during the holiday season.
