Under Armour Faces Stock Decline Amid Weak Sales and Tariff Concerns

Under Armour experienced a sharp decline in its stock value, with shares falling more than 15% in premarket trading following the announcement of its fiscal first-quarter results. The athletic apparel company reported a 4% decrease in revenue to $1.1 billion, falling short of Wall Street expectations. This downturn was particularly notable in North America, the company's largest market, where sales dropped by 5% to $670 million. Internationally, revenue saw a slight decrease of 1% to $467 million, with mixed performance across regions: a 10% growth in EMEA contrasted with declines of 10% in Asia-Pacific and 15% in Latin America.

The company's distribution channels also reflected challenges, with wholesale revenue down 5% to $649 million and direct-to-consumer sales decreasing by 3% to $463 million. E-commerce revenue suffered a significant 12% drop, although sales at owned retail stores saw a modest increase. Under Armour's non-GAAP earnings per share were reported at $0.02, matching last year's figures but missing the $0.03 consensus estimate.

Product category performance varied, with apparel revenue down 1% to $747 million and footwear sales plunging 14% to $266 million. However, accessories revenue increased by 8% to $100 million. Despite a 70 basis point improvement in gross margin to 48.2%, driven by pricing strategies and favorable foreign exchange rates, the company faced headwinds from higher supply chain costs and less profitable sales channels.

Looking forward, Under Armour anticipates a 6% to 7% decline in second-quarter revenue, with North America expected to see a low double-digit decrease. The company's earnings per share forecast of $0.01 to $0.02 falls well below analyst expectations of $0.12. Executives highlighted ongoing margin pressures, attributing them to potential tariff impacts and persistent challenges in sales channel mix. The market's response was immediate, with both Class A (UAA) and Class C (UA) shares experiencing significant drops in early trading.

For more information on Under Armour's financial performance, visit https://www.underarmour.com.