TLDR
- Under Armour stock jumps as adjusted profit offsets weaker Q3 revenue
- Adjusted earnings boost Under Armour despite revenue and margin pressure
- Under Armour rallies as cost controls support stronger adjusted results
- Stock rises after Under Armour posts profit despite GAAP loss
- Under Armour gains 6.9% as investors focus on adjusted performance
Under Armour (UA) shares rises in early trading as strong adjusted results lift sentiment, and the stock gains 6.88% at $6.58. The company posts mixed third-quarter numbers that show progress despite softer demand. Yet the update still outlines a wider GAAP loss and a continued reset in North America.
Q3 Performance Shows Mixed Revenue Trends
Under Armour reports a 5 percent revenue decline to $1.33 billion as retail conditions remain uneven. The company faces a 10% drop in North America while international markets post slight gains. However, EMEA delivers firm growth that offsets weakness in Asia-Pacific.
Under Armour records lower apparel and accessories sales while footwear sees a sharper decline. The company attributes margin pressure to tariffs and channel mix changes. Still, foreign exchange gains help limit the overall margin drop.
Under Armour posts a net loss of $431 million as restructuring and tax valuation items weigh on results. The company reports adjusted net income of $37 million after removing non-operational expenses. Moreover, liquidity remains stable with $465 million in cash and no credit facility borrowing.
Restructuring Costs Continue as Transformation Advances
Under Armour keeps implementing its multiyear restructuring plan to reduce expenses and modernize operations. The company records $75 million in restructuring charges for the quarter. Transformation expenses and litigation costs contribute to higher reported losses.
Under Armour confirms that total restructuring costs may reach $255 million by fiscal 2026. The company notes that most remaining charges will be recognized within the year. Cash-related charges remain modest compared with non-cash components.
Under Armour states that accumulated losses require a valuation allowance on U.S. deferred tax assets. The company says the allowance reflects accounting rules tied to multi-year GAAP losses. It also states that the allowance does not affect cash flow and may reverse when profits return.
Fiscal 2026 Outlook Signals Pressure but Improved Execution
Under Armour expects fiscal 2026 revenue to fall about 4% as North America and Asia-Pacific remain weak. The company forecasts an 8 percent decline in North America and a 6% decline in Asia-Pacific. Yet EMEA is expected to rise about 9 percent.
Under Armour projects a 190 basis-point gross margin decline for the year due to tariffs and pricing headwinds. The company also expects SG&A to fall at a low-double-digit rate. Adjusted SG&A should drop at a mid-single-digit rate due to ongoing cost controls.
Under Armour anticipates a full-year operating loss of $154 million while adjusted operating income may reach $110 million. The company also guides adjusted earnings per share of $0.10 to $0.11. Consequently, the stock moves higher as markets respond to the stronger adjusted performance.
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