Under Armour has released its first-quarter results for fiscal year 2026, revealing a dip in revenue and a cautious forecast for the next quarter as the company continues its multi-year transformation plan.
For Q1, total revenue stood at $1.1 billion, a 4% drop from the same period last year. North American sales slipped 5% to $670 million, while international revenue saw a smaller decline of 1% to $467 million.
Despite the top-line pressure, gross margin improved by 70 basis points to 48.2%. The company attributed this to favourable foreign exchange movements, strategic pricing initiatives, and a stronger product mix. However, these gains were partially offset by increased supply chain costs and an unfavourable channel mix.
Segment Performance
- Direct-to-Consumer: Revenue fell 3% to $463 million, with e-commerce down 12%.
- Apparel: Sales slipped slightly to $747 million.
- Footwear: Dropped 14% compared to last year.
- Accessories: Up 8% to $100 million.
Operating income for the quarter was $3 million, while adjusted operating income reached $24 million. The company reported a net loss of $3 million, with adjusted net income at $9 million.
Restructuring and Transformation
Under Armour’s restructuring programme, first announced in May 2024, is expected to cost between $140 million and $160 million by its conclusion at the end of FY26. So far, $71 million in restructuring and impairment charges have been recorded, alongside $39 million in other transformation-related expenses.
Q2 Outlook
The retailer expects revenue in the second quarter to fall between 6% and 7%, with sharper declines anticipated in North America (low-double digits) and the Asia-Pacific region (low-teens). Gross margin is projected to drop between 340 and 360 basis points, driven by supply chain pressures, including tariff impacts.
Selling, general, and administrative expenses are set to rise due to increased marketing investment. The company forecasts an operating income result ranging from breakeven to a $10 million loss, with adjusted operating income projected between $30 million and $40 million.
Diluted loss per share is expected to be between $0.07 and $0.08, with adjusted diluted EPS between $0.01 and $0.02.
Under Armour President and CEO Kevin Plank said the brand remains focused on premium positioning, innovation-led product offerings, and strengthening its value proposition:
“Regardless of the backdrop, this is about building a fearless, thoughtful and stronger Under Armour.
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