UA — Under Armour, Inc.

Under Armour Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Revenue: Declined 5% to $1.3 billion, slightly better than previous guidance. North America revenue decreased 8%, while EMEA grew 12% (7% currency-neutral). APAC revenue fell 14%.
• Gross Margin: Decreased 250 basis points to 47.3%, primarily due to supply chain headwinds and unfavorable channel mix.
• Operating Income: Reported at $17 million; adjusted operating income was $53 million, outperforming expectations.
• Loss Per Share: Reported diluted loss per share was $0.04, with adjusted diluted earnings per share also at $0.04.
• Inventory: Decreased 6% year-over-year to $1 billion.
• Cash Balance: $396 million at the end of the quarter.

2. Strategic Updates and Business Highlights:

• Leadership Transition: CFO Dave Bergman announced his transition, with Reza Taleghani set to join as the new CFO in February 2026.
• Product Strategy: Focus on streamlining assortments, cutting 25% of SKUs, and enhancing product design and innovation, particularly in footwear and apparel.
• Marketing Campaigns: The "We Are Football" campaign significantly boosted brand awareness among 18-34-year-olds, increasing from mid-60s to over 80%.
• Regional Performance: EMEA showed strong growth, while APAC is in a rebuilding phase. North America is expected to stabilize with improved sell-through rates and stronger wholesale relationships.

3. Forward Guidance and Outlook:

• Full Year Revenue: Expected to decline 4% to 5% in fiscal '26, an improvement from the previous year's 9% decline.
• Gross Margin: Anticipated to decline by 190 to 210 basis points for the full year, mainly due to tariffs.
• Adjusted Operating Income: Projected between $90 million to $105 million for fiscal '26.
• Q3 Revenue Outlook: Expected to decline 6% to 7%, with North America anticipated to see a low double-digit decline.

4. Bad News, Challenges, or Points of Concern:

• Declining Revenue: Overall revenue decline reflects ongoing challenges in North America and APAC, particularly in the wholesale segment.
• Footwear Performance: Footwear revenue fell 16%, attributed to consumer demand pressures and a need to recalibrate the portfolio.
• Gross Margin Pressure: Continued headwinds from tariffs and unfavorable product mix impacting profitability.
• Market Competition: Increased promotional activity in the sector and a need for stronger storytelling to regain consumer interest.

5. Notable Q&A Insights:

• North America Stabilization: CEO Kevin Plank expressed confidence in stabilizing North America by fiscal '27, emphasizing improved product storytelling and relationships with wholesale partners.
• APAC Strategy: Acknowledged the challenges in APAC but highlighted ongoing efforts to stabilize and grow the market, with a focus on premiumization and storytelling.
• Footwear Strategy: Plank reiterated the commitment to footwear, addressing the need for higher price points and better marketing to enhance brand perception.
• Pricing Strategy: CFO Bergman discussed the cautious approach to pricing increases in response to tariffs, emphasizing the importance of strategic execution based on consumer sentiment.

Overall, Under Armour is navigating a challenging environment with a clear focus on product innovation, brand storytelling, and strategic partnerships to drive future growth.