Abstract

Under Armour will release its quarterly results on May 12, 2026 Pre-Market; investors are watching revenue resilience amid ongoing restructuring, margin stabilization after a recent decline, and whether guidance aligns with cautious sell-side expectations.

Market Forecast

Based on the latest market forecasts for the current quarter, Under Armour’s revenue is expected to be 1.16 billion US dollars, down 0.38% year over year, with estimated EBIT of 3.57 million US dollars, up 110.20% year over year, and adjusted EPS around -$0.02, reflecting a 70.45% year-over-year improvement from a deeper loss a year ago. Forecasted gross margin and net margin are not widely published; the focus is on whether discounting eases and operating efficiency stabilizes EPS progression from the prior quarter’s adjusted baseline.

The core business mix remains anchored by apparel, which accounted for 0.93 billion US dollars last quarter, complemented by footwear at 265.14 million US dollars, accessories at 107.66 million US dollars, licensing at 27.16 million US dollars, and minor negative adjustments in other items. The most promising near-term growth vector is the international business—particularly Asia-Pacific—where the last reported quarter delivered 0.19 billion US dollars and a 3% year-over-year increase, suggesting a more constructive demand backdrop outside North America.

Last Quarter Review

In the previous quarter, Under Armour reported revenue of 1.33 billion US dollars (down 5.23% year over year), a gross margin of 44.42%, a GAAP net loss attributable to shareholders of 431.00 million US dollars that translated to a net margin of -32.45%, and adjusted EPS of $0.09 (up 12.50% year over year).

A key highlight was that, despite the GAAP net loss (driven by restructuring and related items), the company delivered positive operating profit, with EBIT of 26.41 million US dollars, underscoring underlying operational earnings power in the quarter. Main business revenue contributions were apparel at 0.93 billion US dollars, footwear at 265.14 million US dollars, accessories at 107.66 million US dollars, and licensing at 27.16 million US dollars; regionally, North America declined 10% year over year while international revenue increased 3%, with Asia-Pacific at 0.19 billion US dollars, and overall gross margin contracted by 3.10 percentage points year over year.

Current Quarter Outlook

Core Apparel Business

Apparel remains the largest revenue driver, providing the financial base for the quarter’s outcome and the clearest signal on whether promotional activity is normalizing. The last quarter’s 44.42% gross margin and the noted year-over-year contraction highlighted a period of heavier discounting and cost pressures relative to the prior year. For the current quarter, the central question is whether Under Armour can moderate promotional intensity and lean more heavily on product newness and channel mix to arrest margin slippage. Stabilization here would likely require balanced sell-through in North America and sustained discipline on markdowns.

Management’s restructuring actions are designed to simplify assortments, tighten distribution, and refocus marketing. In apparel, this translates to prioritizing core performance gear, a push for shelf productivity at key wholesale partners, and more curated direct-to-consumer execution to reduce clearance. If execution improves, apparel units could maintain or slightly expand average selling prices even with flattish volumes, supporting a gross margin recovery path in the second half of the fiscal year. Conversely, if North American demand remains choppy, retailers may insist on additional promotions to move inventory, which could dampen gross margin and put pressure on the current quarter’s EPS that is already forecast near breakeven on an adjusted basis.

Operationally, the apparel trajectory will also depend on inventory health. The previous quarter’s EBIT was positive despite the GAAP loss, indicating underlying cost controls and savings are materializing; sustaining this will require adherence to tighter buy plans, fewer late-season cancellations, and a more even flow of new product into the channel. Watch for management commentary around order cancelations, in-season reorder demand, and channel inventory levels as indicators of whether apparel profitability is turning the corner.

Growth Segment: International and Asia-Pacific

International markets are offering the most dependable growth mechanics in the near term, as evidenced by the recent 3% year-over-year increase and Asia-Pacific’s 0.19 billion US dollars contribution in the last quarter. For the current quarter, this region stands out for two reasons: a relatively steadier macro consumption cadence than North America and the company’s targeted initiatives to elevate retail experiences and community engagement. Expansion and optimization of retail exposure—paired with localized product stories in running, training, and basketball—strengthen the foundation for incremental growth.

Given that revenue is forecast to be roughly 1.16 billion US dollars this quarter on a consolidated basis, even modest incremental performance internationally can become an important offset to North America’s promotional sensitivity. Asia-Pacific’s mix shift toward higher-margin, performance-oriented footwear and apparel SKUs can help support gross margin stability on a consolidated basis if promotional friction remains contained. A notable swing factor is currency; movements against the US dollar may either amplify or blunt reported revenue growth and margin realization. Investors should weigh the interplay of ASPs and sell-through rates in China and broader Asia, as well as the pace of direct-to-consumer growth relative to wholesale in these markets.

From an execution standpoint, localized marketing and community-led retail concepts can drive traffic and conversion, especially around marquee products and curated launches. This quarter’s read-through will come from the cadence of newness and how efficiently that newness converts at the point of sale. If the company can sustain or accelerate the prior quarter’s 3% international growth rate while keeping markdowns in check, it will lend credibility to a gradual multi-quarter margin repair narrative.

Stock-Price Drivers This Quarter

Three variables will anchor the stock’s reaction to the print. First, the evolution of gross margin versus the prior quarter’s 44.42% will be the primary sentiment driver. If gross margin stabilizes or ticks up sequentially—driven by lower promotions, a cleaner inventory position, and improved freight and product cost—investors are likely to give the company credit for operational progress even if revenue is fractionally down year over year. If gross margin weakens, especially in North America, the market may extrapolate a slower recovery and haircuts to full-year profitability expectations.

Second, the degree of operating leverage in a near-flat revenue environment will be scrutinized. Consensus looks for EBIT of 3.57 million US dollars in the quarter, a figure that implies tight control of SG&A and a manageable promotional cadence. Small deviations can swing adjusted EPS given the forecasted -$0.02 result; a few million dollars of variance in gross profit or marketing expense can flip the bottom line from slightly negative to closer to breakeven. Commentary on restructuring savings run-rate, timing of reinvestment, and any incremental charges will therefore be central to interpreting the P&L trajectory beyond this single quarter.

Third, guidance posture and demand signals into the next quarter will color the reaction as much as reported numbers. The market will focus on wholesale order books in North America, inventory turns, and any sign that international momentum can offset domestic softness. Confirmation that Asia-Pacific remains a mid-single-digit growth engine—with potential upside from new retail and community-led initiatives—could underpin confidence in a gradual EPS recovery in the back half, especially if management reiterates a disciplined stance on discounting.

Analyst Opinions

The balance of recent 2026 commentary tilts bearish, with negative ratings action outweighing constructive views when removing neutral holds. A high-profile example is Citigroup’s downgrade to Sell with a stated price target near the mid-6 US dollars range, which was followed by share price weakness as investors digested the implications of continued North American softness and promotional risk. In this framing, bearish analysts emphasize that while the forecast points to a 110.20% year-over-year increase in EBIT to 3.57 million US dollars and a 70.45% improvement in adjusted EPS to approximately -$0.02, the absolute profit base remains thin and susceptible to small shocks in channel demand or promotional cadence.

Bearish arguments underline three stress points for the quarter. First, consensus revenue of 1.16 billion US dollars implies a slight 0.38% year-over-year decline, and pessimists caution that further incremental promotions in North America could push realized revenue mix to lower-margin SKUs, pressuring the gross margin repair path. Second, although restructuring is intended to streamline operations and improve medium-term profitability, the near-term disruption can weigh on execution, as evidenced by the recent GAAP net loss of 431.00 million US dollars and a net margin of -32.45% in the last quarter, which bears interpret as a reminder of how quickly the P&L can be derailed by charges and clearance. Third, even with international growth of 3% and Asia-Pacific’s 0.19 billion US dollars contribution, skeptics argue that these positives may not fully offset North American volatility in the immediate term, especially if wholesale partners remain cautious with open-to-buy and push for additional markdown support to clear older inventory.

What would change bearish minds this quarter is proof of a durable gross margin inflection and cleaner channel inventory—signals such as a sequential improvement in margin from 44.42%, a tighter spread between wholesale and direct-to-consumer markdowns, and commentary indicating accelerating demand for new collections. Clear evidence that SG&A is tracking as planned and that EBIT can outpace the 3.57 million US dollars expectation would also support a transition from caution to a more constructive stance. Until then, the bearish camp expects management to walk a narrow path on promotions and costs to protect profitability against a near-flat revenue base, keeping the valuation debate tethered to execution rather than growth reacceleration.