Shares of Under Armour (NYSE:UAA) fell more than 20% at Tuesday’s market open after the athletic apparel group reported quarterly results below analyst expectations and issued weaker-than-anticipated guidance for fiscal 2027.
The company posted an adjusted loss of $0.03 per share for the fourth quarter, missing consensus estimates for a loss of $0.02 per share.
Revenue declined 1% year-on-year to $1.2 billion, although the figure came in slightly above analyst expectations of $1.17 billion.
North America Weakness Offsets International Growth
Compared with the same period last year, revenue fell 1%, or 4% on a constant-currency basis.
Under Armour said the decline was largely driven by softer performance in North America, where sales dropped 7% to $641 million.
That weakness was partially offset by stronger international demand, with overseas revenue rising 10% to $539 million.
Margins Pressured by Tariffs and Higher Costs
Adjusted gross margin narrowed by 360 basis points to 43.1% during the quarter.
The company said margins were impacted by higher tariffs, rising product costs, pricing pressures and an unfavorable regional sales mix.
For fiscal 2027, Under Armour forecast a slight year-on-year decline in revenue and projected adjusted diluted earnings per share in a range of $0.08 to $0.12.
The midpoint of the forecast, $0.10 per share, reflects continued cost pressures despite anticipated tariff-related refunds.
“Our fiscal 2026 performance reflects the ongoing intentional steps we’re taking to reset the business and restore the discipline required to operate as a best-in-class brand,” said Kevin Plank, President and CEO of Under Armour.
“As our topline stabilizes in fiscal 2027, we are applying the same rigor that is strengthening our product engine to our storytelling capabilities,” he added.
Full-Year Results Impacted by Large Tax Charge
For the full fiscal year 2026, Under Armour reported revenue of $5.0 billion, down 4% from the previous year.
Adjusted diluted earnings per share totaled $0.12 for the year.
The company also posted a net loss of $496 million, including a $247 million valuation allowance related to U.S. federal deferred tax assets.
Analysts Focus on Weak FY2027 Outlook
Analysts said investor attention would likely remain focused on the company’s cautious forward guidance.
“Under Armour had a bit more challenging 4QF26 than expected, with operating income missing the guidance slightly and the FactSet (FS) consensus due to gross margin pressure, while sales were slightly better,” said Cristina Fernández of Telsey Advisory Group in a note following the report.
“However, we expect the focus to be on FY27 guidance for EPS of $0.08-$0.12, well below FS at $0.23, with revenues down slightly YoY vs. FS at growth of 1.7%,” she added.
Fernández also noted: “The guidance incorporates North America revenues down LSD, which is an improvement from the 8% decline in FY26, but remains at the low end of the company’s stabilization range of (2%)-2%. We believe this highlights a competitive environment in sporting goods apparel.”