Under Armour Reports $1.33B in Q3 Revenue along with 2026 Outlook

Under Armour is leaning into a tough reset year with Q3 fiscal 2026 results that beat adjusted profit expectations, even as reported revenue and margins declined under the weight of higher U.S. tariffs, restructuring and a large non‑cash tax charge. The company also tweaked its full year outlook, still calling for a sales decline but now projecting higher adjusted earnings per share as cost cuts and tighter discipline begin to flow through.

Q3 FY2026: Revenue Down but Adjusted Profit Beats

For the quarter ended December 31 2025, revenue fell 5% to $1.33 billion, or 6% on a currency neutral basis. North America revenue dropped 10% to $757 million, while international revenue rose 3% to $577 million, with EMEA up 6 percent, Asia Pacific down 5%, and Latin America up 20%.

By channel, wholesale revenue declined 6% to $660 million, and direct to consumer revenue slipped 4% to $647 million, with owned stores down 2% and e‑commerce down 7%, now representing 38% of DTC sales. By category, apparel revenue declined 3% to $934 million, footwear fell 12% to $265 million, and accessories decreased 3% to $108 million.

Margins, Restructuring and A Large Non Cash Tax Hit

Gross margin contracted 310 basis points to 44.4%, pressured mainly by higher tariffs, plus pricing headwinds and an unfavorable channel and regional mix, partially offset by FX gains and better product mix. SG&A expenses rose 4% to $665 million, but on an adjusted basis excluding a $99 million  litigation reserve and $3 million of transformation costs adjusted SG&A declined 7% to $563 million, largely due to lower marketing spend timing.

Restructuring charges tied to the Fiscal 2025 Restructuring Plan totaled $75 million in the quarter. All in, operating loss was $150 million, but adjusted operating income, excluding litigation, transformation and restructuring, was $26 million. The company booked a net loss of $431 million, including a $247 million non cash valuation allowance against U.S. deferred tax assets; adjusted net income was $37 million, or $0.09 in adjusted diluted EPS, versus a diluted loss per share of $1.01 on a GAAP basis.

CEO Remarks

“Our third quarter adjusted operating results exceeded expectations, and despite a few unfortunate, non recurring impacts, we’re encouraged by the progress we’re making in the business to reignite brand momentum,” Kevin Plank, President and CEO of Under Armour, said. He noted that in North America, the December quarter likely marked the “most challenging phase” of the company’s reset, and he expects “greater stability ahead” as Under Armour builds on this progress globally.

“Our transformation is accelerating as we sharpen our focus and strengthen execution,” Plank said, pointing to “better products, bolder storytelling, and a more disciplined market presence” as key pillars that should allow the brand to operate “with greater intention and confidence going forward.”

Restructuring Plan Progress and Balance Sheet

Announced in May 2024, the Fiscal 2025 Restructuring Plan is now expected to cost up to $255 million, including up to $107 million in cash charges and $148 million in non cash charges. Through Q3 FY2026, Under Armour has recorded $178 million in restructuring and impairment charges and $47 million in other transformation related expenses, with $89 million cash and $135 million non cash. The company expects to recognize remaining charges by the end of fiscal 2026.

On liquidity, inventories decreased 2% to $1.1 billion, cash and cash equivalents stood at $465 million, and the company held $600 million in restricted investments earmarked to repay senior notes due June 2026, with no borrowings on its $1.1 billion revolving credit facility. Management stressed that the large valuation allowance on deferred tax assets has no impact on cash flow or tax filings and should reverse once the U.S. business returns to sustained profitability.

Updated Fiscal 2026 Outlook

For fiscal 2026, Under Armour now expects revenue to decline about 4% versus fiscal 2025, slightly better than its prior outlook of a 4% to 5% decline. This includes an approximate 8% decline in North America and a 6% decline in Asia Pacific, partially offset by about 9% growth in EMEA, all slightly improved versus earlier expectations.

Gross margin is still expected to decline roughly 190 basis points, driven by higher U.S. tariffs, unfavorable mix and pricing pressure, partially offset by FX and product mix. SG&A expenses are now forecast to decline at a low double digit rate (versus mid teens previously), while adjusted SG&A is still expected to fall at a mid single digit rate on lower marketing, restructuring savings and cost initiatives.

The company now anticipates a full year operating loss of about $154 million, but adjusted operating income of roughly $110 million, near the top of the prior $95 to $110 million range. Diluted loss per share is expected between $1.24 and $1.25, with adjusted diluted EPS raised to $0.10 to $0.11, up from $0.03 to $0.05 in the prior outlook, reflecting better than expected underlying performance despite ongoing macro and tariff headwinds.