Under Armour Q3 beats estimates, lifts forecast; ups turnaround costs
Under Armour exceeded analysts' expectations for its third quarter and raised its full-year outlook even as it continues to struggle with slumping sales in its home market.
The athletic gear company reported a net loss of $431 million for the quarter ended Dec. 31, from net income of $1.2 million in the year-ago period. Adjusted net income was $37 million, and earnings per share were $0.09. Analysts had expected an adjusted net loss of $0.01 per share. The adjusted income excluded nonrecurring items, including restructuring charges.
Revenue fell 5.2% to $1.33 billion, above estimates of $1.31 billion. Revenue in Under Armour’s largest market, North America, declined 10% to $757 million. International revenue, led by Latin America and the EMEA, rose 3% to $577 million.
Wholesale revenue decreased 6% to $660 million, and direct-to-consumer revenue fell 4% to $647 million. Within DTC, owned-and-operated store revenue declined 2%. E-commerce revenue fell 7%, representing 38% of total DTC revenue for the quarter.
Under Armour launched a restructuring plan in May 2024. In reporting its third-quarter earnings, the company revealed that the plan is now expected to cost up to $255 million (including up to $107 million in cash charges and up to $148 million in non-cash charges), up from its estimate in November of $160 million. The plan was estimated to incur charges of $70 million to $90 million when it was first announced.
In a statement, Under Armour president and CEO Kevin Plank sounded an upbeat note, and said that despite a few “unfortunate, non-recurring impacts,” the company is encouraged by the progress it is making to reignite brand momentum.
"In North America, we believe the December quarter marked the most challenging phase of our business reset, and we expect greater stability ahead as we build on this progress globally,” he said. “Our transformation is accelerating as we sharpen our focus and strengthen execution. Our strategy is gaining traction through better products, bolder storytelling, and a more disciplined market presence, positioning Under Armour to operate with greater intention and confidence going forward."
Under Armour raised its guidance for fiscal 2026. It now expects earnings per share of $0.10 to $0.11, up from its prior outlook of $0.03 to $0.05 per share. Revenue is expected to decline about 4%, compared to its previous estimate of a 4% to 5% decline.
