Key Takeaways
- Shares of UAA plummeted approximately 12-13% in premarket hours following a Q4 earnings disappointment
- Company posted an adjusted quarterly loss of $0.03 per share, worse than the expected $0.02 loss
- Quarterly revenue declined 1% year-over-year to reach $1.2 billion; North American sales tumbled 7%
- Profit margins contracted amid tariff headwinds, elevated product expenses, and competitive pricing challenges
- Management’s FY2027 earnings outlook of $0.08–$0.12 per share fell dramatically short of the $0.23 Wall Street forecast
The athletic apparel manufacturer delivered disappointing fourth-quarter results on Tuesday morning, triggering a sharp decline of roughly 13% in premarket activity to around $5.21 per share.
For the final quarter of its fiscal year, the company recorded an adjusted per-share loss of $0.03, falling short of analyst projections that called for a $0.02 loss. While the variance appeared modest on paper, Wall Street’s response was decidedly harsh.
Quarterly sales totaled $1.2 billion, representing a 1% decline from the comparable year-ago period. This figure modestly exceeded consensus forecasts of $1.17 billion, though it proved insufficient to counterbalance the earnings shortfall and conservative forward guidance.
The North American market remains a significant challenge area. Sales in this region contracted 7% to $641 million during the quarter. International operations demonstrated stronger performance with 10% growth reaching $539 million, though this couldn’t fully compensate for domestic weakness.
Wholesale channel revenue similarly declined, retreating 3% to $747.7 million.
Profitability Challenges Mount
Gross profit margin emerged as a particularly troublesome metric. On a reported basis, margins contracted by 470 basis points to 42%. When adjusted, the compression measured 360 basis points, landing at 43.1%.
Multiple factors contributed to this margin deterioration: escalating tariff costs, rising manufacturing expenses, intensified pricing competition, and an unfavorable geographic revenue composition. These challenges converged simultaneously to pressure profitability.
For the complete fiscal 2026 period, Under Armour generated $5.0 billion in revenue, marking a 4% year-over-year decrease. Full-year adjusted earnings per share registered at $0.12.
The company also recognized a net loss of $496 million for FY2026, incorporating a $247 million valuation allowance related to U.S. federal deferred tax assets.
Chief Executive Kevin Plank characterized the results as part of a strategic transformation effort. “Our fiscal 2026 performance reflects the ongoing intentional steps we’re taking to reset the business and restore the discipline required to operate as a best-in-class brand,” he stated.
Forward Guidance Disappoints Investors
The company’s outlook proved particularly concerning for market participants. Management projected FY2027 adjusted earnings per share in the range of $0.08 to $0.12. The midpoint of this guidance range, $0.10, stands substantially below the Wall Street consensus estimate of $0.23.
Revenue is anticipated to experience another modest year-over-year decline in FY2027.
Operating income guidance ranges from $96 million to $116 million. This projection incorporates a $70 million positive impact from anticipated tariff refund recoveries, though this benefit is partially offset by $35 million in headwinds stemming from Middle Eastern conflict disruptions and $30 million allocated to incremental marketing expenditures.
These marketing investments form part of Plank’s comprehensive strategy to enhance brand narrative and positioning. The ultimate effectiveness of this approach has yet to materialize in financial performance.
The company’s FY2027 projections illustrate an organization navigating through a transformation phase while contending with external cost pressures and working to revitalize brand equity.
UAA shares were changing hands at approximately $5.21 during Tuesday’s premarket session, representing a decline from the previous closing price of $6.06.
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