Under Armour (NYSE:UAA) shares fell more than 3% in pre-market trading on Friday after the sportswear company lowered its revenue outlook for fiscal 2027, offsetting a stronger-than-expected first-quarter earnings performance.
The company reported adjusted earnings of $0.05 per share for the quarter ended 30 June, exceeding analysts’ expectations of $0.02 per share. Revenue totalled $1.1 billion, broadly in line with forecasts of $1.11 billion.
Revenue Declines Despite Margin Improvement
First-quarter revenue declined 3% year over year, or 4% on a constant-currency basis, reflecting softer consumer demand across several key markets.
Gross margin improved by 590 basis points to 54.1%, largely due to one-off refunds linked to International Emergency Economic Powers Act tariffs that had been recognised as costs during fiscal 2026.
The benefit was partially offset by adverse foreign exchange movements, changes in regional and sales channel mix, and pricing pressures.
Company Cuts Fiscal 2027 Revenue Forecast
Management revised its full-year guidance, now expecting revenue to decline at a mid-single-digit percentage rate, compared with its previous forecast for only a slight decrease.
The weaker outlook reflects slowing demand, particularly in North America and the Asia-Pacific region.
Under Armour now anticipates a mid-single-digit sales decline in North America, compared with its earlier expectation of a low-single-digit decline.
The company also expects revenue in both Asia-Pacific and the EMEA region to decline slightly, reversing its previous forecast for low-single-digit growth in those markets.
Earnings Outlook Remains Broadly In Line
Under Armour expects adjusted earnings per share for fiscal 2027 to range between $0.08 and $0.12, broadly matching analysts’ consensus estimate of $0.11.
The company forecasts a diluted loss per share of between $0.01 and $0.05, compared with its previous outlook ranging from break-even to a loss of $0.04 per share.
Operating income reached $47 million during the quarter, while adjusted operating income, excluding restructuring and transformation expenses, totalled $52 million.
Net income was $1 million, while adjusted net income came to $21 million after excluding those one-off charges.
Restructuring Programme Nears Completion
Under Armour recorded $4 million of restructuring expenses during the quarter.
Since launching its Fiscal 2025 Restructuring Plan, the company has incurred total costs of $266 million, comprising $116 million in cash charges and $150 million in non-cash charges.
Management expects the programme’s total cost to reach approximately $305 million and anticipates it will be substantially completed by 31 December 2026.
At quarter-end, Under Armour held $396 million in cash and cash equivalents and had $200 million drawn under its $1.1 billion revolving credit facility.
Under Armour stock price
