Under Armour Inc. Reports Mixed Results in 2026 Q1
Under Armour Inc., a prominent player in the sportswear industry, recently released its financial report for the first quarter of 2026, revealing a landscape marked by both challenges and opportunities. Despite facing headwinds in various markets, the company is strategically positioned to enhance operational efficiencies through its ongoing restructuring plan.
1. Overview of Under Armour Inc.
Founded in 1996, Under Armour has established itself as a leader in performance apparel, footwear, and accessories. The brand is particularly recognized for its innovative moisture-wicking technologies designed to cater to athletes and active consumers worldwide. As the company navigates a challenging global market, its strategic initiatives aim to bolster financial performance and operational effectiveness.
2. Quarterly Results
For the three months ending June 30, 2026, Under Armour reported a noteworthy decline in net income, showcasing the impact of various macroeconomic factors and operational challenges. Key financial highlights include:
- Net Revenues: $1.13 billion
- Operating Income: $3.32 million
- Net Income: $(2.61 million)
The results indicate a slight recovery in revenue compared to the previous year, where the net revenues were reported at $1.18 billion for the same period in 2025.
| Aug 2024 | Aug 2025 | |
|---|---|---|
Net Income | -81.93M | 101.5M |
Profit | -82.13M | 100.6M |
Net Income Continuing | -82.13M | 100.6M |
Income Tax Expense | 31.17M | -10.70M |
Pretax Income | -50.95M | 89.92M |
Non-operating Income | 39.94M | -27.90M |
Operating Income | -90.90M | 117.8M |
Revenue | 5.56B | 5.11B |
Costs and Expenses | 5.65B | 4.99B |
Cost of Revenue | 2.98B | 2.65B |
Operating Expenses | 2.67B | 2.34B |
Selling, General & Administrative | 2.65B | 2.29B |
Other Operating Expenses | 25.08M | 45.71M |
Revenue Breakdown
The sales performance across different segments revealed mixed results:
- North America: Revenue continued to decline, reflecting a challenging retail environment.
- EMEA: Showing resilience, this region reported a revenue increase, driven by both wholesale and direct-to-consumer growth.
- Asia-Pacific: Revenues decreased, impacted by lower demand in both channels.
- Latin America: Sales fell significantly, primarily due to adverse foreign exchange impacts.
3. Financial Performance Overview
Operating Income and Margins
Under Armour's operating income showed slight improvement at $3.32 million for Q1 2026, compared to a significant loss in the previous year. However, the company continues to grapple with high operating expenses totaling $1.13 billion, which was consistent with revenue, indicating a need for cost management and efficiency improvements.
Gross Margins
Under Armour's gross margin improved to 48.2%, an increase of 70 basis points compared to the prior year, indicating effective cost management strategies despite the declining revenue environment.
4. Balance Sheet Analysis
As of June 30, 2026, Under Armour's total assets stood at $4.86 billion, consistent with the previous year's figures. The company's liabilities totaled $2.99 billion, reflecting a manageable debt structure. Notably, cash and cash equivalents increased to approximately $911 million, providing liquidity to support ongoing operations and strategic initiatives.
| Aug 2024 | Aug 2025 | |
|---|---|---|
Total Assets | 4.86B | 4.86B |
Total Current Assets | 2.96B | 2.90B |
Cash and Equivalents | 884.5M | 910.9M |
Net Inventories | 1.11B | 1.14B |
Accounts Receivable | 684.6M | 623.7M |
Prepaid Expenses | 279.1M | 226.3M |
Total Non-current Assets | 1.89B | 1.96B |
Intangible Assets | 482.5M | 501.2M |
Non-current Deferred Tax Assets | 228.4M | 314.7M |
Net PP&E | 671.1M | 613.1M |
Lease Assets | 418.7M | 364.9M |
Other Non-current Assets | 91.58M | 168.1M |
Total Liabilities and Equity | 4.86B | 4.86B |
Total Liabilities | 3.04B | 2.99B |
Total Current Liabilities | 1.71B | 1.89B |
Accounts Payable and Accrued Liabilities | 1.39B | 967.8M |
Current Debt | 134.9M | 728.3M |
Other Current Liabilities | 187.6M | 199.1M |
Total Non-current Liabilities | 1.32B | 1.09B |
Long-term Debt | 595.3M | 389.4M |
Other Non-current Liabilities | 730.2M | 705.9M |
Total Equity and Non-controlling Interests | 1.81B | 1.87B |
Total Equity | 1.81B | 1.87B |
5. Cash Flow and Capital Resources
Under Armour reported a significant improvement in cash flow, with a net change in cash of $410.1 million for the quarter. This increase was driven by net cash from financing activities, particularly the issuance of $400 million in senior notes due 2030.
| Aug 2024 | Aug 2025 | |
|---|---|---|
Net Change in Cash | 183.2M | 21.99M |
Effect of Exchange Rate Changes | -10.51M | 16.75M |
Net Cash from Operating Activities | 505.9M | -163.4M |
Operating Profit | -81.93M | 101.5M |
Adjustment to Operating Profit | 587.8M | -264.9M |
Net Cash from Investing Activities | -106.4M | -166.0M |
Business & Interest in Affiliates | -50M | 57.66M |
Productive Assets | 156.4M | 158.3M |
Other Investing Activities | 0 | 50M |
Net Cash from Financing Activities | -205.6M | 334.7M |
Debt | -80.91M | 400M |
Equity Issuance/Repurchase | -112.0M | -47.59M |
Other Financing Activities | -12.72M | -17.68M |
Share Repurchase Program
Under Armour continued its share repurchase program, having repurchased $90 million worth of shares as of the end of Q1 2026. This initiative reflects the company's commitment to returning value to shareholders despite the operational challenges faced in the current market.
6. 2025 Restructuring Plan
The ongoing restructuring plan, approved by Under Armour's Board of Directors in 2025, is expected to enhance operational efficiencies and reduce costs. The plan is projected to incur pre-tax restructuring charges between $140 million to $160 million, with a significant portion dedicated to employee severance and benefits costs.
7. Macroeconomic Factors and Global Events
The company remains vigilant in monitoring the global trade environment, as changes in trade policy may indirectly affect consumer spending. Under Armour anticipates a negative impact of roughly $100 million on the cost of goods sold in Fiscal 2026, primarily due to increased tariff rates.
8. Conclusion
Under Armour Inc. continues to navigate a tumultuous market landscape while executing strategic initiatives aimed at enhancing operational efficiency and financial performance. The company's focus on restructuring, monitoring macroeconomic factors, and expanding its global presence is central to its long-term growth objectives. As the brand works to adapt to evolving market conditions, its commitment to innovation and performance remains a driving force in its strategic vision.
