Under Armour Q3 Earnings Beat Expectations Amid Declining Revenue Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2d ago
0mins
Should l Buy UAA?
Source: seekingalpha
- Earnings Beat: Under Armour reported a Q3 non-GAAP EPS of $0.09, exceeding expectations by $0.10, despite a revenue decline of 5% year-over-year to $1.33 billion, which still beat estimates by $20 million, indicating resilience in challenging conditions.
- Fiscal 2026 Outlook Adjustment: The company expects a revenue decline of approximately 4% for fiscal 2026, an improvement from the prior outlook of 4% to 5%, with North America and Asia-Pacific projected to decline by 8% and 6%, respectively, while EMEA is expected to grow by about 9%, reflecting regional demand disparities.
- Gross Margin Decline: Gross margin is anticipated to decrease by approximately 190 basis points, primarily due to higher U.S. tariffs and unfavorable channel and regional mix, along with pricing pressures, although favorable foreign exchange and product mix may partially offset these negative impacts.
- Widening Operating Loss: The expected operating loss is around $154 million, significantly higher than the prior outlook of $56 million to $71 million, while adjusted operating income is projected at $110 million, highlighting the challenges faced during the restructuring and transformation process.
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Analyst Views on UAA
Wall Street analysts forecast UAA stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for UAA is 5.69 USD with a low forecast of 4.00 USD and a high forecast of 9.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
19 Analyst Rating
4 Buy
12 Hold
3 Sell
Hold
Current: 6.280
Low
4.00
Averages
5.69
High
9.00
Current: 6.280
Low
4.00
Averages
5.69
High
9.00
About UAA
Under Armour, Inc. is an inventor, marketer and distributor of branded athletic performance apparel, footwear and accessories for men, women and youth. Its primary business operates in four geographic segments: North America, comprising the United States and Canada, Europe, the Middle East and Africa (EMEA), Asia-Pacific, and Latin America. Its apparel comes in three primary fit types: compression (tight fit), fitted (athletic fit) and loose (relaxed fit). Its footwear includes products for running, training, basketball, cleated sports, recovery and outdoor applications, as well as casual use. Its accessories primarily include athletic performance gloves, bags, headwear and socks. It sells its apparel, footwear and accessories in North America through wholesale and direct-to-consumer channels. It sells its apparel, footwear and accessories in EMEA primarily through wholesale customers and independent distributors, along with e-commerce Websites and brand and factory house stores.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Financial Performance Exceeds Expectations: Q3 revenue declined 5% to $1.3 billion, with North America down 10% but EMEA up 6%; the adjusted operating income outlook has been raised to $110 million, reflecting the company's efforts in cost control and execution consistency.
- Leadership Changes: Under Armour announced several strategic leadership changes, including Kara Trent as Chief Merchandising Officer, Adam Peake as President of the Americas, and Eric Liedtke as Chief Marketing Officer, aimed at driving business growth through product line simplification and enhancing emotional connections with the brand.
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Impact on Business Strategy: The book's findings are influencing Under Armour's business strategies and operations in the American market.
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Business Recovery: Under Armour's CEO indicates that North American business is starting to recover, showing signs of improvement after a challenging period.
Quarterly Marketing Strategy: The company is focusing on marketing strategies for the upcoming quarter to enhance brand visibility and drive sales.
Resetting Expectations: Under Armour is working on resetting expectations following a period of decline, aiming to stabilize and grow its market presence.
Future Outlook: The CEO expresses optimism about the future, suggesting that the company is on the right path to recovery and growth in the competitive sportswear market.
See More
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- Earnings Beat: Under Armour's Q3 adjusted operating results exceeded expectations, with CEO Kevin Plank noting brand momentum is being reignited despite some non-recurring impacts, suggesting greater stability ahead.
- Sales Guidance Adjustment: The company now expects FY26 sales to decline by approximately 4%, better than the previous forecast of a 4% to 5% decline, with an 8% drop in North American sales offset by a 9% increase in EMEA sales, indicating market performance divergence.
- Profit Outlook Raised: Under Armour raised its adjusted profit outlook to a range of $0.10 to $0.11 per share, surpassing the consensus estimate of $0.05, reflecting improvements in cost management and market strategy.
- Gross Margin Expectations: The gross margin is now expected to decline by 190 basis points, primarily due to rising tariffs and unfavorable channel and regional mix, although this aligns with the previous guidance of a 190 to 210 basis point decline.
See More
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- Strategic Execution Progress: Under Armour's CEO Kevin Plank emphasized that the company is entering the next phase of its turnaround, having completed a 25% SKU reduction which significantly improved inventory levels, indicating substantial progress in execution and structure that enhances market competitiveness.
- Financial Performance Exceeds Expectations: Q3 revenue declined 5% to $1.3 billion, with North America down 10% but EMEA up 6%; the adjusted operating income outlook has been raised to $110 million, reflecting the company's efforts in cost control and execution consistency.
- Leadership Changes: Under Armour announced several strategic leadership changes, including Kara Trent as Chief Merchandising Officer, Adam Peake as President of the Americas, and Eric Liedtke as Chief Marketing Officer, aimed at driving business growth through product line simplification and enhancing emotional connections with the brand.
- Optimistic Future Outlook: The company updated its full-year revenue outlook to a decline of approximately 4%, improving from the previous 4%-5% decline expectation, showcasing management's confidence in future stability, particularly with ongoing growth in the EMEA region.
See More
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- Performance Exceeds Expectations: Under Armour reported Q3 2026 revenue of $1.327 billion, a 5% year-over-year decline, yet it surpassed analyst expectations of $1.313 billion, indicating resilience in challenging market conditions.
- Improved Adjusted EPS: While diluted loss per share was $1.01, the adjusted EPS came in at 9 cents, beating the expected loss of 2 cents, reflecting progress in cost control and operational efficiency.
- Diverse Regional Performance: North America revenue fell 10% to $757 million, while international revenue rose 3% to $577 million, with Latin America up 20%, highlighting varying performance and growth opportunities across global markets.
- Optimistic Future Outlook: Under Armour raised its adjusted EPS guidance for fiscal 2026 to 10-11 cents, exceeding market expectations, and projected revenue of approximately $4.96 billion, despite an overall expected decline of 4%, showcasing management's confidence in future growth.
See More
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- Under Armour's CEO Statement: The CEO of Under Armour believes that the most disruptive phase of their reset strategy is now behind them.
- Focus on Future Growth: The company is looking forward to focusing on future growth and stability after overcoming recent challenges.
See More
Under Armour CEO Optimistic About Fall Order Book Trends in America
Under Armour CEO's Perspective: The CEO of Under Armour expresses encouragement from the insights gained through the book "How Our Fall Order Book is Shaping Up in America."
Impact on Business Strategy: The book's findings are influencing Under Armour's business strategies and operations in the American market.
See More
Under Armour CEO Indicates North America Business is Starting to Improve, with December Quarter Signaling the Low Point of Reset - Conference Call
Business Recovery: Under Armour's CEO indicates that North American business is starting to recover, showing signs of improvement after a challenging period.
Quarterly Marketing Strategy: The company is focusing on marketing strategies for the upcoming quarter to enhance brand visibility and drive sales.
Resetting Expectations: Under Armour is working on resetting expectations following a period of decline, aiming to stabilize and grow its market presence.
Future Outlook: The CEO expresses optimism about the future, suggesting that the company is on the right path to recovery and growth in the competitive sportswear market.
See More
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- Earnings Beat: Under Armour's Q3 adjusted operating results exceeded expectations, with CEO Kevin Plank noting brand momentum is being reignited despite some non-recurring impacts, suggesting greater stability ahead.
- Sales Guidance Adjustment: The company now expects FY26 sales to decline by approximately 4%, better than the previous forecast of a 4% to 5% decline, with an 8% drop in North American sales offset by a 9% increase in EMEA sales, indicating market performance divergence.
- Profit Outlook Raised: Under Armour raised its adjusted profit outlook to a range of $0.10 to $0.11 per share, surpassing the consensus estimate of $0.05, reflecting improvements in cost management and market strategy.
- Gross Margin Expectations: The gross margin is now expected to decline by 190 basis points, primarily due to rising tariffs and unfavorable channel and regional mix, although this aligns with the previous guidance of a 190 to 210 basis point decline.
See More
