Under Armour navigates challenging consumer environment in Q1 2027

US sportswear brand Under Armour, Inc. (Under Armour) recorded net sales decrease of 3 percent to 1.10 billion dollars, or 4 percent on a constant currency basis for the first quarter of fiscal 2027 ended June 30, 2026.

The group recorded net income of one million dollars, down from the prior-year period. On an adjusted basis, net income reached 21 million dollars, excluding transformation and restructuring charges. Adjusted diluted earnings per share reached 0.05 dollars.

Operating income for the quarter reached 47 million dollars, while adjusted operating income reached 52 million dollars. Gross margin expanded 590 basis points to 54.1 percent, primarily supported by refunds received from the recovery of International Emergency Economic Powers Act (IEEPA) tariff expenses incurred in fiscal 2026.

Under Armour president and chief executive officer Kevin Plank stated: “As we navigate a challenging consumer demand environment, we continue to make progress in building a more focused Under Armour, despite updating our full-year revenue outlook. By simplifying the business, we are operating with greater discipline and better positioned to protect profitability, while still investing in a sharper product portfolio through clearer storytelling with the goal of driving a more premium Under Armour that will consistently earn demand at full price.”

Regional performance and distribution channels

During the first quarter, sales performance varied across regional markets and distribution networks:

North America: Revenue declined 9 percent to 610 million dollars.

International: Revenue expanded 5 percent to 490 million dollars, or 2 percent on a constant currency basis. Within international territories, Europe, the Middle East and Africa (EMEA), increased 12 percent, Latin America grew 8 percent, and Asia-Pacific fell 7 percent.

Wholesale: Revenue contracted 2 percent to 638 million dollars.

Direct-to-consumer: D2C revenue decreased 6 percent to 437 million dollars. Within the D2C segment, owned-and-operated store sales fell 3 percent, while e-commerce revenue dropped 12 percent, representing 29 percent of total D2C revenue.

Across product divisions, apparel revenue fell 2 percent to 734 million dollars, footwear revenue dropped 8 percent to 245 million dollars, and accessories sales contracted 4 percent to 96 million dollars.

Updated full year outlook

Following lower consumer demand across North America and Asia-Pacific, Under Armour updated its financial outlook for the full 2027 fiscal year with revenue projected to decline at a mid-single-digit percentage rate, adjusted downward from prior expectations of a slight decline. North America is expected to drop at a mid-single-digit rate, while EMEA and Asia-Pacific are forecasted to decline at low-single-digit rates.

Gross margin is expected to expand 220 to 270 basis points year-over-year, including approximately 150 basis points from IEEPA tariff recoveries, offset by Middle East supply chain disruptions and foreign exchange pressures.

The company's operating income projection is maintained in the range of 96 million dollars to 116 million dollars, with adjusted operating income expected between 140 million dollars and 160 million dollars. The operating income outlook incorporates a 70 million dollar benefit from IEEPA tariff refunds and 35 million dollars in operational headwinds linked to Middle East regional conflicts.

Diluted loss per share is expected to range between 0.01 dollars and 0.05 dollars per share, while adjusted diluted earnings per share is reaffirmed in the range of 0.08 dollars to 0.12 dollars.