Under Armour Q1 Fiscal 2027 Revenue Falls 3% as North America Weakness Prompts Full-Year Outlook Cut

Under Armour reported its financial results for the first quarter of fiscal 2027 on August 7, posting a 3% year-over-year decline in revenue to $1.1 billion. On a constant-currency basis, revenue decreased 4%.

The company continued to face pressure in its core North American market, where revenue fell 9%, while direct-to-consumer, eCommerce and footwear sales also declined from a year earlier. Internationally, however, the company delivered growth led by EMEA. Gross margin also improved significantly, supported in part by refunds related to tariff costs recognized in the prior fiscal year.

Citing softer demand, particularly in North America and Asia-Pacific, Under Armour lowered its fiscal 2027 full-year revenue outlook from a slight decline to a mid-single-digit percentage decrease.

Summary

North America Revenue Falls 9% as EMEA Posts Double-Digit Growth

Revenue in North America, Under Armour’s largest market, declined 9% year over year to $610 million. International revenue, meanwhile, increased 5% to $490 million, or 2% on a constant-currency basis.

Within international markets, EMEA revenue rose 12%, or 10% in constant currency, delivering the strongest regional performance. Latin America revenue increased 8%, while Asia-Pacific declined 7%, or 10% on a constant-currency basis.

By distribution channel, wholesale revenue decreased 2% to $638 million, while direct-to-consumer revenue fell 6% to $437 million.

Within DTC, revenue from owned-and-operated stores declined 3%, while eCommerce sales fell 12%. eCommerce accounted for 29% of total DTC revenue during the quarter.

Across product categories, apparel revenue decreased 2% to $734 million, footwear declined 8% to $245 million, and accessories fell 4% to $96 million, leaving all three major categories below prior-year levels.

Gross Margin Improves to 54.1% Despite Revenue Decline

While revenue remained under pressure, Under Armour delivered a significant improvement in gross margin.

First-quarter gross margin expanded by 590 basis points year over year to 54.1%, driven primarily by refunds associated with International Emergency Economic Powers Act, or IEEPA, tariff costs that had been expensed in fiscal 2026.

The benefit was partially offset by unfavorable foreign exchange effects, regional and channel mix, and pricing headwinds.

Selling, general and administrative expenses increased 2% to $543 million. Excluding $2 million in transformation expenses related to the company’s Fiscal 2025 Restructuring Plan, adjusted SG&A rose 4% to $541 million.

Operating income totaled $47 million, while adjusted operating income, excluding transformation and restructuring charges, reached $52 million.

Net income was $1 million, while adjusted net income came in at $21 million. Diluted earnings per share were $0.00, compared with adjusted diluted earnings per share of $0.05. Inventory decreased 3% to $1.1 billion.

Toward a More Premium Under Armour

Under Armour President and CEO Kevin Plank said the company remains focused on reshaping the business despite the difficult demand environment.

“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,” Plank said. “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.”

The company’s current strategy extends beyond cost reduction alone. Under Armour is simplifying its operating structure while continuing to invest in product assortment and brand storytelling, with the aim of reducing its reliance on discounting and strengthening full-price demand.

Rather than prioritizing near-term sales growth at any cost, the company is placing greater emphasis on disciplined marketplace management, pricing and long-term brand health. Plank’s push toward a “more premium Under Armour” has become a central pillar of the company’s broader restructuring efforts.

Restructuring Costs Reach $266 Million to Date

Under Armour recorded $4 million in restructuring charges and $2 million in transformation-related expenses during the first quarter under its Fiscal 2025 Restructuring Plan.

Total restructuring and transformation costs incurred to date have reached $266 million, including $116 million in cash charges and $150 million in non-cash charges.

The company expects total program costs to be approximately $305 million and anticipates the restructuring plan will be substantially completed by December 31, 2026.

Full-Year Revenue Outlook Cut on Softer Demand in North America and Asia-Pacific

Following the first-quarter results, Under Armour lowered its fiscal 2027 full-year revenue outlook.

The company now expects revenue to decline at a mid-single-digit percentage rate from the prior year, compared with its previous forecast for a slight decrease. The revision reflects weaker demand, particularly in North America and Asia-Pacific.

In North America, revenue is now expected to decline at a mid-single-digit rate, compared with the previous outlook for a low-single-digit decrease.

Asia-Pacific is now projected to post a low-single-digit decline, reversing the company’s previous expectation for low-single-digit growth. EMEA is also expected to decline at a low-single-digit rate, compared with the prior forecast for low-single-digit growth.

Despite the weaker revenue outlook, Under Armour maintained its forecast for gross margin expansion of 220 to 270 basis points versus the prior year.

Approximately 150 basis points of that improvement is expected to come from the recovery of IEEPA-related tariff expenses recognized in fiscal 2026 and realized during the first quarter.

Excluding that benefit, the company continues to expect margin expansion supported by pricing actions, lower discounting and a more favorable channel mix. Supply-chain pressures related to the conflict in the Middle East and unfavorable foreign exchange effects are expected to remain headwinds.

Profit Guidance Maintained Despite Lower Revenue Expectations

While Under Armour lowered its revenue outlook, the company maintained its profit guidance.

Fiscal 2027 operating income is still expected to range from $96 million to $116 million, while adjusted operating income, excluding transformation and restructuring charges, is projected at between $140 million and $160 million.

The company expects tighter expense management and a more agile, disciplined operating model to offset a substantial portion of the impact from lower revenue.

Its SG&A outlook was also revised. Including transformation expenses, SG&A is now expected to decline at a high-single-digit rate, compared with the previous forecast for a low-single-digit decrease.

Adjusted SG&A, excluding transformation expenses, is now projected to decline at a low-single-digit rate, versus the previous expectation for a low-single-digit increase.

The full-year outlook also incorporates an approximately $70 million benefit from refunds related to prior-year IEEPA tariff expenses, as well as roughly $35 million in headwinds associated with the conflict in the Middle East.

Diluted loss per share is now expected to range from $0.01 to $0.05, compared with the prior forecast of breakeven to a loss of $0.04 per share. Adjusted diluted earnings per share guidance remains unchanged at $0.08 to $0.12.

With demand remaining under pressure, particularly in North America, Under Armour is shifting its focus away from pursuing sales volume alone and toward protecting margins, reducing discounting and strengthening long-term brand equity. While a return to top-line growth remains a challenge, the company’s ability to combine cost discipline with a more premium positioning will be a key factor in determining whether its current reset can translate into sustainable growth.

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