Under Armour Cuts Full-Year Gross-Margin Outlook

The Tip Desk · November 6, 2026 · 4 min read

Second-quarter revenue fell 7% to $1.2 billion as the company cut its fiscal 2027 gross-margin lift to 170–220 basis points.

Under Armour, Inc. (UAA), the Baltimore-based performance apparel company, reported second-quarter fiscal 2027 revenue of $1.2 billion, a 7% decline that was steeper than the 3% drop in the first quarter. President and CEO Kevin Plank said the company delivered against its revenue expectation and exceeded its operating income outlook.

The sequential acceleration of the decline was the quarter’s defining turn. North America revenue fell 7% to $737 million. International revenue reversed to a 7% decline to $509 million, or 9% in constant currency, after a 5% increase in the prior quarter. EMEA revenue reversed to a 9% decline, or 8% constant currency, after a 12% increase. Asia-Pacific revenue declined 9%, or 12% constant currency. Latin America revenue increased 3%, or declined 4% constant currency.

Wholesale revenue decreased 6% to $725 million. Direct-to-consumer revenue decreased 8% to $494 million. Owned-and-operated store revenue declined 7%. eCommerce revenue decreased 12%, remaining 27% of DTC revenue. Apparel revenue decreased 6% to $880 million. Footwear revenue declined 11% to $234 million. Accessories revenue decreased 7% to $105 million.

Gross margin compressed 30 basis points to 47.0%. The company said the decline was primarily due to unfavorable foreign currency, channel and regional mix, and pricing, partially offset by supply chain benefits and favorable product mix. That reversed the 590-basis-point increase to 54.1% in the first quarter, which had been driven largely by refunds associated with the recovery of IEEPA tariff costs expensed in fiscal 2026.

Selling, general and administrative expenses decreased 4% to $557 million. The company attributed the decline primarily to lower marketing expenses and disciplined cost management. Excluding transformation expenses and the reversal of certain previously accrued litigation reserve expense, adjusted SG&A decreased 3% to $559 million. Restructuring charges totaled $11 million. Operating income was $15 million. Adjusted operating income was $25 million. Net loss was $0.4 million. Adjusted net loss was $2 million. Diluted loss per share and adjusted diluted loss per share were $0.00.

Inventory increased 4% to $1.1 billion. Cash and cash equivalents totaled $285 million at quarter-end. Borrowings outstanding under the company’s $1.1 billion revolving credit facility were $190 million. Under the Fiscal 2025 Restructuring Plan, the company recorded $11 million in restructuring charges and $2 million in transformation-related SG&A expenses in the quarter, for $13 million. Cumulative program costs rose to $280 million. Total program costs remain anticipated at approximately $305 million, and the company expects the plan to be substantially complete by December 31, 2026. Company-owned doors totaled 438 at September 30, 2026, down from 447 a year earlier.

The company updated its fiscal 2027 outlook to reflect additional external cost pressures and planned inventory actions. Revenue is still expected to decline at a mid-single-digit percentage rate versus fiscal 2026. Gross margin is now expected to increase 170 to 220 basis points versus the prior expectation of a 220 to 270 basis point improvement, due largely to higher fuel and freight costs, impacts of planned inventory management actions, and foreign exchange headwinds. Approximately 150 basis points of the improvement versus the prior year is due to the recovery of IEEPA-related tariff costs expensed in fiscal 2026 and realized in the first quarter of fiscal 2027. Excluding that benefit, the company continues to expect gross margin expansion driven by pricing actions, lower discounting, and a more favorable channel and product mix, partially offset by increased supply chain headwinds related to the ongoing conflict in the Middle East and unfavorable foreign exchange.

SG&A expense is still expected to decrease at a high-single-digit rate, including transformation expenses and the litigation-reserve reversal. Adjusted SG&A is still expected to decrease at a low-single-digit rate. Operating income is now expected to be $99 million to $119 million versus the prior expectation of $96 million to $116 million. Adjusted operating income is still expected to be $140 million to $160 million. The outlook includes an approximate $70 million benefit from refunds of prior-year IEEPA tariff expenses, partially offset by larger-than-anticipated Middle East conflict headwinds of approximately $45 million versus a prior $35 million. Diluted loss/earnings per share is now expected to range from a loss of $0.02 to earnings of $0.02 versus the prior expectation of a loss of $0.01 to $0.05. Adjusted diluted earnings per share is still expected to be $0.08 to $0.12.