UAA — Under Armour, Inc.

Under Armour Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Revenue: Decreased by 5% to $1.3 billion, slightly better than expectations, with a 1% benefit from shipment timing shifts.
• Regional Performance:
  • North America: Revenue down 8% due to declines in full-price wholesale and e-commerce.
  • EMEA: Revenue up 12% (7% currency-neutral), driven by full-price wholesale and strong DTC growth.
  • APAC: Revenue down 14%, primarily from wholesale challenges.
  • Latin America: Revenue increased by 15% (14% currency-neutral).
• Gross Margin: Declined by 250 basis points to 47.3%, impacted by supply chain headwinds and unfavorable channel mix.
• Operating Income: Reported at $17 million; adjusted operating income was $53 million.
• Earnings Per Share: Reported diluted loss per share of $0.04; adjusted diluted earnings per share also at $0.04.
• Inventory: Decreased by 6% year-over-year to $1 billion.

2. Strategic Updates and Business Highlights:

• Leadership transition announced with Dave Bergman stepping down as CFO, to be succeeded by Reza Taleghani in February 2026.
• Focus on product innovation, particularly in footwear and apparel, with a streamlined SKU assortment and emphasis on high-quality materials.
• Successful product launches, including the Velociti Elite 3 running shoe, which has garnered positive attention.
• Strong marketing campaigns, such as "We Are Football," have significantly increased brand awareness among younger consumers.
• Emphasis on rebuilding relationships with wholesale partners and enhancing the direct-to-consumer experience.

3. Forward Guidance and Outlook:

• Full-year revenue expected to decline by 4% to 5%, an improvement from the previous year's 9% decline.
• Anticipated gross margin decline of 190 to 210 basis points due to tariffs, partially offset by pricing benefits and improved product mix.
• Adjusted SG&A expenses expected to decline at a mid-single-digit rate.
• Q3 revenue forecasted to decline by 6% to 7%, with North America expected to see a low double-digit decline.

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

• Declining revenue across key regions, particularly North America and APAC, signaling ongoing challenges in the wholesale business.
• Gross margin pressures from increased tariffs and unfavorable product mix.
• Footwear revenue down 16%, reflecting a need for strategic recalibration in this category.
• The competitive landscape remains challenging, with a need to enhance storytelling and brand perception to regain market share.

5. Notable Q&A Insights:

• Kevin Plank emphasized the importance of storytelling to connect with consumers, stating that Under Armour does not have a product issue but rather a storytelling opportunity.
• Confidence in North America’s stabilization was discussed, with a focus on product quality and strategic partnerships.
• The company is addressing pricing elasticity cautiously, with selective price increases planned for future products.
• Insights into the APAC market indicated a belief that stabilization is achievable, with a focus on improving brand storytelling and product presentation.

Overall, Under Armour is navigating a challenging environment with strategic initiatives aimed at revitalizing brand perception and driving product innovation, while facing headwinds from declining sales and market pressures.