Under Armour (UAA) Cuts Full-Year Sales Outlook as Q1 Revenue Falls Short
Under Armour (UAA) lowered its full-year revenue outlook on Friday, and investors responded quickly, driving the sportswear maker’s Class A and Class C shares down more than 5% during the session. The company pointed to weakening demand in North America and Asia Pacific, and its fiscal first-quarter sales reinforced those concerns by missing Wall Street estimates.
Key Points
- Guidance cut: Under Armour now expects fiscal 2027 revenue to fall by a mid-single-digit percentage, a sharper drop than its earlier “slight” decline forecast.
- Q1 miss: Revenue slipped 3% to $1.1 billion, just under the $1.11 billion consensus, while adjusted EPS climbed to $0.05 from $0.02 a year earlier.
- Regional split: North America sales fell 9% and Asia Pacific dropped 6.6%; meanwhile, EMEA jumped 12% and Latin America rose 7.7%.
- Weak near-term view: For the current quarter, the company guided to an adjusted loss of $0.01–$0.03 per share, versus the Street’s $0.05 profit forecast.
- Sector backdrop: Rivals UAA peers Crocs and Nike recently flagged similar softness, underscoring an industry-wide slowdown.
A Steeper Decline Than Expected
Rather than the modest dip it previously projected, Under Armour now forecasts a mid-single-digit percentage revenue decline for fiscal 2027. Analysts on FactSet, by comparison, had modeled sales of $4.94 billion, or a 0.6% year-over-year decrease. The company traced the downgrade directly to soft demand, and it singled out two regions in particular. In North America, it now expects a mid-single-digit sales decline, whereas it had earlier called for only a low-single-digit drop. Similarly, in Asia Pacific it now anticipates a low-single-digit decline, a clear reversal from its previous forecast of low-single-digit growth.
Breaking Down the Quarter
For the quarter ended June 30, Under Armour (UAA) generated $1.1 billion in revenue, down 3% and just shy of the $1.11 billion analysts expected. On the bottom line, however, the company delivered better momentum, as adjusted EPS rose to $0.05 from $0.02 in the year-ago quarter, matching the Street’s view.
The regional results diverged sharply. North America sales dropped 9%, and Asia Pacific fell 6.6%; in contrast, Europe, the Middle East and Africa surged 12%, while Latin America gained 7.7%. By channel, wholesale revenue eased 1.6% to $638.5 million, and direct-to-consumer sales fell 5.8% to $436.5 million. Meanwhile, across categories, apparel slipped 1.7% to $734 million, footwear retreated 7.7% to $245.3 million, and accessories shed 4.4% to $95.7 million.
Management Stays the Course
Despite the cut, CEO Kevin Plank framed the quarter as evidence of progress. “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,” he said. Furthermore, he emphasized discipline over volume, noting that by simplifying the business the company can “protect profitability, while still investing in a sharper product portfolio.” Consistent with that stance, Under Armour reaffirmed its full-year adjusted EPS guidance of $0.08 to $0.12, roughly in line with the Street’s $0.11.
The Road Ahead
Looking to the current quarter, however, the outlook turns cautious. The company expects an adjusted loss of $0.01 to $0.03 per share, whereas Wall Street had penciled in a $0.05 profit. Even so, some analysts remain constructive on the longer arc. Last month, for instance, UBS Securities said it expects considerable product innovation over the next few years to support a recovery in revenue growth over time.
Finally, the broader industry context matters. Crocs recently issued downbeat third-quarter guidance, and Nike reported a year-over-year revenue decline in its most recent fiscal fourth quarter. Taken together, these signals suggest UAA is contending with pressures that extend well beyond its own brand.
