Under Armour recently announced its fiscal first quarter results, which exceeded Wall Street’s expectations. Despite a decline in sales, the athletic apparel retailer posted better-than-feared earnings per share and revenue figures. The company reported earnings of 1 cent per share, adjusted, compared to the 8 cents per share loss that was expected. Additionally, Under Armour’s revenue of $1.18 billion surpassed the anticipated $1.15 billion.
The company reported a loss of $305.4 million in the three months ended June 30, a significant decrease from the $10 million profit reported in the same period last year. Sales also dropped by about 10% year-over-year, falling to $1.18 billion from $1.32 billion. Furthermore, Under Armour had to settle a long-standing securities lawsuit for $434 million, stemming from allegations of defrauding shareholders about its revenue growth in order to meet Wall Street’s forecasts.
Under Armour is currently undergoing a broad restructuring plan aimed at reversing a sales slump, boosting profits, and regaining relevance in the market. The company has implemented measures such as layoffs, reduction in promotions and discounts, and streamlining its product assortment to enhance competitiveness. It also aims to position itself as a premium brand, following a strategy similar to that of Nike.
Despite sales declines, Under Armour’s first quarter results showed signs of improvement. Sales in North America, the company’s largest market, exceeded analyst expectations. Wholesale revenue dropped by 8%, while direct-to-consumer sales declined by 12%. Although online sales plummeted by 25%, this was attributed to planned decreases in promotional activities. Apparel revenue fell by 8%, footwear sales by 15%, and accessories revenue by 5%.
In an effort to revitalize its brand and attract customers, Under Armour has acquired sustainable fashion brand Unless Collective. The company plans to leverage the expertise of Unless Collective’s founder, former Adidas-exec Eric Liedtke, to enhance brand strategy and accelerate growth. The acquisition is part of Under Armour’s broader initiative to expand into sustainable fashion and distinguish itself in the crowded athletic apparel market.
While the first quarter results were better than feared, analysts caution that it will take time for Under Armour to regain momentum and achieve sustained growth. The company’s focus on premium positioning and core fundamentals may act as catalysts for long-term success, but the impact of new products is not expected until the second half of fiscal 2026. Challenges such as maintaining a strong brand image, evolving the product portfolio, and navigating intense competition remain key risks for the company.
Overall, Under Armour’s recent performance reflects a mix of challenges and opportunities as it navigates a competitive market and strives to position itself for future growth and success.
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