Under Armour’s Earnings Call: Mixed Sentiments and Strategic Shifts

Under Armour Inc – Class C ((UA)) has held its Q2 earnings call. Read on for the main highlights of the call.

Under Armour’s Recent Earnings Call: Mixed Sentiments and Strategic Shifts

The recent earnings call for Under Armour Inc. revealed a blend of optimism and challenges. The company highlighted positive developments such as leadership changes, product innovations, and strong brand campaigns. However, it also faced hurdles including revenue declines in key regions, tariff impacts, and pressures on gross margins. Despite these challenges, Under Armour expressed optimism about future stabilization and growth, particularly in North America and the Asia-Pacific (APAC) region.

Leadership Transition

Under Armour announced a significant leadership transition with Kevin Plank revealing that Dave Bergman will step down as CFO. Reza Taleghani, a seasoned finance executive, will take over the role in February 2026. This change is anticipated to bolster Under Armour’s strategic growth initiatives.

Product Innovation and Strategy

The company is making strides in product innovation by streamlining assortments, cutting 25% of SKUs, and refocusing its materials library. A key highlight is the prioritization of NEOLAST, a sustainable fiber developed to replace Lycra. Under Armour aims to elevate its price points through these innovations and style enhancements.

Positive Brand Momentum

Under Armour’s ‘We Are Football’ campaign has significantly boosted brand awareness among 18-34-year-olds, increasing from the mid-60s to over 80%. This demonstrates strong engagement and brand recognition, particularly in the younger demographic.

EMEA Revenue Growth

The company reported a 12% increase in revenue in the EMEA region, with a 7% rise when adjusted for currency. This growth was driven by robust performance in full-price wholesale and direct-to-consumer (DTC) channels.

Licensing Revenue Increase

Licensing revenues saw a 17% increase, fueled by strength in international markets. This highlights the success of Under Armour’s licensing strategy in expanding its global footprint.

North America Revenue Decline

Despite positive developments, North America experienced an 8% revenue decline. This was attributed to a decrease in full-price wholesale business and lower e-commerce sales, posing a challenge for the company.

APAC Revenue Decline

The APAC region faced a 14% revenue decline, driven by challenges in the wholesale business and a modest decrease in DTC sales. This remains a critical area for Under Armour to address.

Footwear Revenue Decline

Footwear revenue fell by 16%, reflecting ongoing challenges in consumer demand and efforts to recalibrate the footwear portfolio. This segment remains a focal point for improvement.

Gross Margin Decline

Under Armour’s gross margin declined by 250 basis points to 47.3%, primarily due to supply chain headwinds and higher U.S. tariffs. This decline underscores the financial pressures the company is navigating.

Fiscal Year Revenue Outlook

Looking ahead, Under Armour projects a full-year revenue decline of 4% to 5%, with continued pressures from U.S. tariffs and challenges in North America and APAC. The company expects adjusted SG&A to decrease at a mid-single-digit rate. For Q3, a 6% to 7% revenue decline is anticipated, with a gross margin decrease of 310 to 330 basis points. The focus remains on stabilizing the North American business, enhancing product pricing, and improving storytelling to rebuild brand momentum.

In conclusion, Under Armour’s recent earnings call painted a picture of mixed sentiments, with both promising developments and significant challenges. The company is actively pursuing strategic changes in leadership, product innovation, and market engagement to navigate these hurdles and drive future growth.