US-based sportswear retailer Under Armour has announced its financial results for the first quarter (Q1) of fiscal 2026 (FY26), highlighting a decline in revenue and a cautious outlook for Q2.
The company's revenue fell 4% to $1.1bn, with North American revenue down 5% to $670m and international revenue down 1% to $467m.
Despite these challenges, Under Armour's gross margin improved 70 basis points to 48.2%, largely attributed to beneficial foreign exchange rates, strategic pricing decisions and an advantageous product mix. This was partially counterbalanced by a less favourable channel mix and an increase in supply chain expenses in comparison to the previous year.
Under Armour president and CEO Kevin Plank stated: "We are pleased our quarterly results met or exceeded our expectations as we drive a bold transformation – sharpening Under Armour into a brand where sports credibility, innovation and style meet operational discipline."
Direct-to-consumer revenue dropped by 3% to $463m, with e-commerce revenue dip of 12%.
Apparel revenue decreased slightly to $747m, footwear revenue saw a significant drop of 14% and accessories revenue grew 8% to $100m.
Operating income stood at $3m while adjusted operating income was $24m.
The retailer posted a net loss of $3m with adjusted net income of $9m.
The company's fiscal 2025 restructuring plan, announced in May 2024, is estimated to cost between $140m and $160m.
As of the end of Q1 FY26, Under Armour had recorded $71m in restructuring and impairment charges, along with $39m in other related transformational expenses.
The plan is expected to be completed by the end of FY26.
Under Armour expects Q2 FY26 revenue to decline by between 6% and 7%, with a low-double-digit percent decrease in North America and a low-teens percent decline in the Asia-Pacific region.
Gross margin is projected to decline between 340 and 360 basis points due to supply chain headwinds, including the impact of tariffs.
Selling, general and administrative expenses are anticipated to rise, driven by higher marketing investments.
Operating income could see a loss of up to $10m or breakeven, with adjusted operating income forecasted to be between $30m and $40m.
Diluted loss per share is expected to range from $0.07 to $0.08, with adjusted diluted earnings per share between $0.01 and $0.02.
Plank added: "Moving ahead, we're focused on strengthening our brand positioning with premium products and increasing our average selling prices through innovative offerings, optimising our top-volume programmes, and creating a more compelling full, price-to-value proposition. Regardless of the backdrop, this is about building a fearless, thoughtful and stronger Under Armour."
