Under Armour’s reset shows early gains as global markets offset US weakness

Under Armour’s latest quarterly results reveal a company in the middle of a hard reset: operationally improving beneath the surface, but still weighed down by structural costs, tariffs, and a shrinking North American footprint.

The US sportswear group reported third-quarter fiscal 2026 revenue of $1.33 billion, down 5% year on year, and a net loss of $431 million, driven largely by a $247 million non-cash valuation allowance on US deferred tax assets. Excluding that accounting charge and other one-offs, adjusted net income reached $37 million, while adjusted operating income came in at $26 million, exceeding internal expectations.

Quarter challenges

Chief executive Kevin Plank said the December quarter likely marked the “most challenging phase” of Under Armour’s turnaround in North America, adding that the business is beginning to show signs of stabilization as its global transformation gains traction.

The headline loss masked sharp regional contrasts. North America revenue fell 10% to $757 million, continuing a multi-year decline, while international revenue rose 3% to $577 million, led by 6% growth in EMEA and a 20% surge in Latin America. Asia-Pacific sales declined 5%, reflecting softer consumer demand and ongoing market resets.

Margins remain under pressure. Gross margin slid 310 basis points to 44.4%, primarily due to higher US tariffs, alongside pricing headwinds and an unfavorable channel mix. Selling, general and administrative expenses rose 4% to $665 million, but on an adjusted basis fell 7%, reflecting lower marketing spend and early restructuring savings.

Ongoing restructuring

Under Armour is deep into a multi-year restructuring first announced in 2024, now expected to cost up to $255 million. By the end of the quarter, the company had incurred $224 million, most of it non-cash, with the balance to be recognized by the end of fiscal 2026. Inventory levels fell 2% to $1.1 billion, while liquidity remained solid, with $465 million in cash and no borrowings under its $1.1 billion credit facility.

For the full fiscal year, Under Armour slightly narrowed its revenue decline outlook to around 4%, while raising its expected operating loss to $154 million, reflecting litigation reserves and restructuring charges. Adjusted earnings per share are now forecast at $0.10 to $0.11, up from prior guidance.

Industry analysts caution that execution remains the key risk. GlobalData managing director, Neil Saunders, said in a note that Under Armour continues to lose market share in North America, where years of unclear brand positioning have dulled consumer appeal, even as newer rivals gain momentum. However, stronger growth in Europe and Latin America suggests the brand still has room to rebuild—if it can translate operational discipline into a clearer, more compelling identity.

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Hannah Xuchille Egot

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