Under Armour (UAA) Q1 2027 Earnings Report

The call presented a balanced picture: clear operational progress (cost discipline, SKU rationalization, inventory control, product wins like the Bouncy Tee, and an adjusted operating income beat) contrasted with a deteriorating top-line backdrop driven by softer consumer demand, promotional market dynamics, China execution issues and footwear/category weakness. Management lowered revenue guidance but maintained profitability targets by cutting and reallocating spend, relying in part on non-recurring tariff refunds. Overall, strengths in execution and product momentum are offset by meaningful near-term demand risks.

Under Armour updated fiscal‑2027 guidance after a Q1 in which revenue fell 3% to $1.1B (North America −9%, EMEA +12%/+10% cc, APAC −7%/−10% cc, Latin America +8%/+1% cc), wholesale −2%, DTC −6% (stores −3%, e‑commerce −12%), apparel −2%, footwear −8% and accessories −4%; Q1 gross margin rose 590 bps to 54.1% (driven by 640 bps of IEEPA tariff refunds and 50 bps supply‑chain benefits, partly offset by 50 bps FX, 30 bps mix and 20 bps pricing headwinds), SG&A was $543M (+2%, +4% ex $2M transformation), operating income $47M (adjusted $52M vs prior outlook $30–40M), GAAP EPS breakeven (adjusted EPS $0.05), ending inventory $1.1B (−3% YoY), cash $396M and $200M drawn on the revolver; the company now expects full‑year revenue to decline mid‑single‑digits but is maintaining adjusted operating income of $140–160M, gross‑margin expansion of ~220–270 bps (including ~150 bps IEEPA benefit), adjusted SG&A to decline low‑single‑digits, assumes a 10% tariff, guides Q2 revenue down high‑single‑digits with Q2 adjusted OI $10–20M and adjusted diluted loss per share $0.01–0.03, cited Q1 restructuring/transform charges of $6M ( $266M incurred to date — $116M cash/$150M noncash; ~$305M expected, substantially complete by 12/31), targets further SKU cuts (another 25% over 18 months, ~40%+ total by end‑’28) and expects to be free‑cash‑flow positive this year.