Under Armour (NYSE:UA) . lowered its fiscal 2027 revenue outlook after first-quarter sales declined 3% to $1.1 billion, citing softer consumer demand in North America and Asia-Pacific and a more promotional retail environment. The company maintained its full-year adjusted operating income forecast of $140 million to $160 million, pointing to tighter cost management and a more disciplined operating model.
President and CEO Kevin Plank said the company does not intend to pursue lower-quality volume through heavier discounting. Instead, Under Armour is emphasizing product-line simplification, full-price selling, inventory control and more focused marketing tied to product launches and athlete storytelling.
Regional and Channel Performance
North America revenue fell 9% in the first quarter, driven by softer spring and summer wholesale orders as well as traffic pressures in e-commerce and company-operated stores. Direct-to-consumer revenue declined 6%, including a 12% drop in e-commerce and a 3% decrease in owned and operated retail stores.
Chief Financial Officer Reza Taleghani said traffic challenges intensified as the quarter progressed, particularly in North America and China. The company said it saw consumer demand weaken beginning in late May, while competitors’ inventory clearances contributed to increased promotional activity in the market.
Asia-Pacific revenue declined 7%, or 10% on a constant-currency basis. Results in China and Southeast Asia were weaker than anticipated. In China, the company also cited stock-outs in key styles and sizes and demand cannibalization from licensing partners that discounted aggressively.
EMEA revenue increased 12%, or 10% on a constant-currency basis, supported by distributor business growth. However, Under Armour said it expects fiscal-year EMEA revenue to decline at a low-single-digit rate amid a competitive and promotional environment. Latin America revenue rose 8%, aided by foreign exchange, while constant-currency revenue increased 1%.
By category, apparel revenue declined 2%, footwear sales fell 8%, and accessories revenue decreased 4%. Sportswear was an area of growth, while outdoor and golf partially offset footwear declines. The company’s running business was flat during the quarter.
Profitability Exceeds Outlook
Despite lower sales, adjusted operating income reached $52 million, above Under Armour’s prior outlook of $30 million to $40 million. Adjusted diluted earnings per share were $0.05, while reported diluted EPS was breakeven.
Gross margin expanded 590 basis points year over year to 54.1%. The improvement included a 640-basis-point benefit from IEEPA tariff refunds related to costs expensed in fiscal 2026, as well as supply-chain benefits. Those gains were partly offset by unfavorable foreign exchange, product and channel mix, and increased discounting.
SG&A expenses increased 2% to $543 million. Excluding transformation expenses, adjusted SG&A rose 4%, which Taleghani said was better than the company’s expected high-single-digit increase. The company cited the timing of marketing spending and reductions in discretionary operating expenses.
Under Armour ended the quarter with $1.1 billion in inventory, down 3% from a year earlier, and $396 million in cash. Taleghani said inventory was generally current-season merchandise with active demand and that inventory should trend with revenue for the full year.
Outlook Cut as Company Protects Margins
Under Armour now expects fiscal 2027 revenue to decline at a mid-single-digit rate. It forecasts a mid-single-digit revenue decline in North America and low-single-digit declines in both EMEA and Asia-Pacific.
The company maintained its expectation for gross-margin expansion of approximately 220 to 270 basis points for the full year, including roughly 150 basis points from IEEPA tariff refunds. It continues to assume a 10% tariff rate from July through the end of its fiscal year, while noting potential supply-chain pressures tied to the Middle East conflict.
For the second quarter, Under Armour expects revenue to decline at a high-single-digit rate, including high-single-digit declines in North America and Asia-Pacific and a low-double-digit decline in EMEA. It forecast adjusted operating income of $10 million to $20 million and an adjusted diluted loss per share of $0.01 to $0.03.
The company now expects adjusted SG&A to decline at a low-single-digit rate for the year. Marketing spending is expected to fall toward the lower end of management’s previously discussed range of 10% to 11% of revenue, though executives said the change reflects a reallocation toward more efficient spending rather than a retreat from brand investment.
Product Simplification and Full-Price Focus
Plank said Under Armour has already reduced its Fall/Winter 2026 assortment by 25% compared with two years earlier and is targeting a further 25% SKU reduction over the next 18 months. He said the company is seeking to concentrate investment on its highest-potential franchises, including HeatGear, Velociti and StealthForm.
The company highlighted the Bouncy Tee, which launched in May and has exceeded expectations at its $65 full retail price, as an example of its intended product and marketing approach. Plank said the product combines innovation, design and cultural marketing, and he described it as a model for future launches.
Under Armour is also refreshing its Tech Tee program, which Plank said has been discounted too often, while preparing to introduce the higher-priced Helix Tee later this year at $35. The company plans to market Helix around its stretch, recyclability and quick-dry attributes.
“We will not solve that by chasing unhealthy volume or buying short-term revenue,” Plank said in closing remarks. “We’ll solve it by editing the line, cleaning up the marketplace, sharpening our storytelling, and turning our strongest assets into consistent demand.”
About Under Armour (NYSE:UA)
Under Armour, Inc is a global designer, marketer and distributor of branded performance apparel, footwear and accessories. The company’s product portfolio spans a wide range of athletic categories, including running, training, basketball, outdoor and golf, with specialized lines for men, women and youth. Under Armour emphasizes innovative fabrics and technologies designed to enhance athletic performance, such as moisture-wicking HeatGear®, cold-weather ColdGear® and UV-protective UA Tech™ materials.
The company was founded in 1996 by former University of Maryland football captain Kevin Plank, who sought to create a superior moisture-wicking T-shirt to keep athletes cool and dry.
