Under Armour Reports Fiscal 2025 Results and First Quarter 2026 Outlook
Under Armour, Inc. (NYSE: UAA, UA) has released its financial results for the fourth quarter and full fiscal year 2025, ending March 31, 2025. The report reveals both challenges and strategic advancements as the company continues to navigate a complex retail environment.
1. Fourth Quarter Fiscal 2025 Overview
Under Armour reported a revenue decline of 11%, totaling $1.2 billion for the fourth quarter, with North American revenue down 11% to $689 million and international revenue decreasing by 13% to $489 million. The company attributed the international declines primarily to a significant 27% drop in Asia-Pacific revenue, alongside a 10% decline in Latin America.
Key Financial Metrics
- Wholesale revenue fell 10% to $768 million.
- Direct-to-consumer revenue saw a sharper decline of 15%, totaling $386 million, with eCommerce sales down 27%.
- Apparel revenue decreased by 11% to $780 million, while footwear experienced a steeper drop of 17% to $282 million. Accessories revenue, however, saw a slight increase of 2% to $92 million.
- The gross margin improved by 170 basis points to 46.7%, aided by lower product and freight costs, though partially offset by a less favorable regional mix.
The company reported an operating loss of $72 million for the quarter. After adjusting for restructuring charges and transformation expenses, the adjusted operating loss was $36 million. The net loss for the quarter stood at $67 million, translating to a diluted loss per share of $0.16.
2. Full Year Fiscal 2025 Review
In the full fiscal year, Under Armour's revenue declined by 9% to $5.2 billion. North American revenue fell by 11% to $3.1 billion, while international revenue decreased by 6% to $2.1 billion.
Annual Highlights
- Gross margin for the full year increased by 180 basis points to 47.9%, reflecting benefits from supply chain optimization and a reduction in promotional discounting.
- Selling, general, and administrative expenses rose by 8% to $2.6 billion, while adjusted SG&A expenses fell by 2% to $2.3 billion, excluding litigation settlement expenses and transformation costs.
- The company recorded a net loss of $201 million, leading to a diluted loss per share of $0.47. Adjusted net income, however, stood at $135 million, resulting in an adjusted diluted earnings per share of $0.31.
3. Share Buyback Initiatives
During the fourth quarter, Under Armour repurchased $25 million of its Class C common stock, retiring 4.1 million shares. To date, a total of 12.8 million shares have been repurchased for $90 million as part of a three-year, $500 million share repurchase program initiated in May 2024.
4. Restructuring Efforts
Under Armour's restructuring plan, announced in May 2024, aims to enhance financial and operational efficiencies with an estimated cost range of $140 million to $160 million. To date, the company has recognized $58 million in restructuring and impairment charges.
5. First Quarter Fiscal 2026 Outlook
Looking forward, Under Armour anticipates a 4% to 5% revenue decline for the first quarter of fiscal 2026 compared to the same period in the previous year. The company expects mixed performance across regions, with North America projected to decline similarly and EMEA forecasted for high single-digit growth, while Asia-Pacific may see a mid-teen percentage decline.
Key Projections for Q1 2026
- Gross margin is expected to increase by 40 to 60 basis points.
- Selling, general, and administrative expenses are forecasted to decrease by approximately 40% compared to Q1 2025, influenced by the absence of significant litigation settlement expenses.
- Operating income is projected to be between $5 million and $15 million, with adjusted operating income expected to be between $20 million and $30 million.
- The company anticipates a diluted loss per share ranging from $0.00 to $0.02, with adjusted diluted earnings per share expected between $0.01 and $0.03.
6. Conclusion
Under Armour’s fourth-quarter results highlight the ongoing challenges the company faces in a competitive retail landscape while also showcasing its commitment to restructuring and repositioning for future growth. As the company navigates these changes, stakeholders will be keenly observing the impact of its strategies on financial performance in the upcoming quarters.
