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Under Armour (UAA)
NYSE:UAA
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Under Armour
(NYSE:UAA)
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Rating:55Neutral
Price Target:
$6.50
▲(6.21% Upside)
Action:ReiteratedDate:02/07/26
The score is held back primarily by weak financial performance (TTM losses, revenue contraction, and negative free cash flow). Technicals are a key support with strong momentum above major moving averages, though indicators are stretched. Earnings call takeaways are mixed, with modestly improved guidance and better adjusted results offset by continued top-line and margin headwinds and large GAAP-impacting charges; valuation support is limited due to negative earnings and no provided dividend yield.
Positive Factors
International Growth
Sustained double-digit growth in Latin America and mid-single-digit EMEA growth show the company can generate durable top-line growth outside North America. Geographic diversification reduces concentration risk, supports wholesale and DTC expansion, and provides alternative growth engines over the next several quarters.
Inventory & SKU Rationalization
A completed 25% SKU cut and lower inventory indicate improved assortment discipline and working-capital efficiency. Fewer low-productivity styles should raise inventory turns, reduce promotional reliance, and improve forecasting and margin sustainability over a multi-quarter horizon.
Liquidity & Balance Sheet Management
Meaningful cash plus an undrawn revolver and restricted investments dedicated to notes reduce near-term refinancing risk and preserve optionality. Stronger liquidity supports restructuring execution and investment in product initiatives without immediate capital markets dependency.
Negative Factors
Profitability Deterioration
A sustained swing to net losses and negative EBITDA undermines internal funding for growth, erodes return on equity, and can impair long-term reinvestment. Persistent unprofitability increases reliance on cost actions or external financing to stabilize operations over coming quarters.
Footwear Weakness
Footwear is a strategic, higher-growth category; continued double-digit declines indicate structural assortment and product issues. Weak footwear dynamics constrain overall top-line recovery and limit mix-improvement opportunities that normally lift margins and brand momentum over multiple quarters.
Gross Margin Pressure
Material margin compression from higher tariffs, promotional activity, and mix shifts threatens sustainable operating margins. If tariffs and promotional intensity persist, margin recovery will rely on product-cost savings and price discipline that can take several quarters to materialize.
Under Armour (UAA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.57B
Dividend YieldN/A
Average Volume (3M)11.61M
Price to Earnings (P/E)―
Beta (1Y)0.90
Revenue Growth-6.35%
EPS Growth-565.47%
CountryUS
Employees6,800
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Manufacturers
Share Statistics
EPS (TTM)0.09
Shares Outstanding188,834,380
10 Day Avg. Volume13,249,808
30 Day Avg. Volume11,610,105
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)1.43
Price to Sales (P/S)0.52
P/FCF Ratio-11.85
Enterprise Value/Market Cap1.71
Enterprise Value/Revenue0.88
Enterprise Value/Gross Profit1.90
Enterprise Value/Ebitda-218.93
Forecast
1Y Price Target
$7.18Price Target Upside17.32% Upside
Rating ConsensusHold
Number of Analyst Covering16
EPS Forecast (FY)0.11
Revenue Forecast (FY)$4.96B
Under Armour Business Overview & Revenue Model
Company DescriptionUnder Armour, Inc., together with its subsidiaries, engages in the developing, marketing, and distributing performance apparel, footwear, and accessories for men, women, and youth. The company offers its apparel in compression, fitted, and loose fit types. It also provides footwear products for running, training, basketball, cleated sports, recovery, and outdoor applications. In addition, the company offers accessories, which include gloves, bags, headwear, and sports masks; and digital subscription and advertising services under the MapMyRun and MapMyRide platforms. It primarily offers its products under the UNDER ARMOUR, UA, HEATGEAR, COLDGEAR, HOVR, PROTECT THIS HOUSE, I WILL, UA Logo, ARMOUR FLEECE, and ARMOUR BRA brands. The company sells its products through wholesale channels, including national and regional sporting goods chains, independent and specialty retailers, department store chains, mono-branded Under Armour retail stores, institutional athletic departments, and leagues and teams, as well as independent distributors; and directly to consumers through a network of 422 brand and factory house stores, as well as through e-commerce websites. It operates in the United States, Canada, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America. Under Armour, Inc. was incorporated in 1996 and is headquartered in Baltimore, Maryland.
How the Company Makes MoneyUnder Armour primarily makes money by selling branded athletic products—apparel, footwear, and accessories—through two main routes: (1) wholesale and (2) direct-to-consumer (DTC). In the wholesale channel, Under Armour sells products in bulk to third-party retailers and distributors (e.g., sporting goods stores, department stores, online retailers, and international distributors), generating revenue based on the price and volume of shipments to these partners. In the DTC channel, Under Armour sells directly to end consumers through its own e-commerce platforms and company-owned and operated retail stores (including outlet and brand stores), capturing retail margin but also bearing store operations, fulfillment, and marketing costs. The company’s revenue is driven by product category demand—apparel historically being a major contributor, with footwear and accessories also meaningful—and by its ability to maintain brand relevance through product innovation, marketing, and athlete/team sponsorships and endorsements that support demand and pricing power. International sales (outside North America) contribute to revenue through a mix of wholesale relationships, distributors, and DTC operations depending on the market. Under Armour’s earnings are influenced by factors such as product mix (e.g., higher-margin items), discounting and promotions (especially in outlet and off-price environments), retailer order patterns, inventory management, supply chain and sourcing costs, and foreign currency movements on international revenue.
Under Armour Earnings Call Summary
Earnings Call Date:Feb 06, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 20, 2026
Earnings Call Sentiment Neutral
The call communicated tangible operational progress—inventory and SKU simplification, improved product momentum in key franchises, adjusted results that beat expectations, and a modestly improved full-year outlook—offset by continued material headwinds: GAAP losses driven by large nonrecurring charges (litigation reserve, restructuring, and a tax valuation allowance), gross margin pressure from tariffs and promotions, and pronounced footwear and North America top-line weakness. Management emphasized stabilization, a clearer operating model, and confidence in execution while acknowledging work remains.Q3-2026 Updates
Positive Updates
Adjusted Results Ahead of Expectations
Adjusted Q3 operating income of $26M exceeded guidance; adjusted diluted EPS of $0.09 (ex-items) also beat outlook. Company modestly raised its full-year adjusted operating income outlook to approximately $110M (high end of prior range).
Revenue Performance and Outlook Improvement
Q3 revenue declined 5% to $1.3B, slightly better than prior outlook (including ~1 ppt benefit from timing of wholesale shipments). Full-year revenue expectation narrowed/improved to ~4% decline versus prior -4% to -5% range.
Regional & Channel Wins (EMEA and Latin America)
EMEA revenue grew 6% reported (2% currency-neutral) driven by wholesale and DTC; Latin America grew 20% reported (13% cc) with balanced growth across the business—demonstrating pockets of strong international performance.
Balance Sheet and Liquidity Strength
Ended Q3 with $465M cash, $600M in restricted investments dedicated to senior notes, repaid ~ $200M of revolver borrowings and finished the quarter with no amounts outstanding under the $1.1B revolver, reflecting improved liquidity management.
Inventory and Complexity Reduction Progress
Inventory down 2% year-over-year to just over $1B; completed the 25% SKU rationalization started in fiscal 2025 and continuing efforts to simplify assortments and raw material complexity—driving tighter assortments and better planning.
Product Momentum and Pricing Power
Base layer (heat and cold gear) delivered strong double-digit growth and higher ASPs; ICON fleece and women’s Meridian gaining traction. Early footwear and sportswear launches (Velocity Elite 3, Acerta 11, HP Low, Solo, ARC 96) showed strong sell-through and higher ASP signals.
Direct-to-Consumer and Digital Engagement
Digital engagement remains strong; e-commerce conversion improved despite a promotional environment. Tools like SMS and TikTok Shop are contributing to growth and improved DTC execution.
Cost Discipline and SG&A Improvement (Adjusted)
Adjusted SG&A decreased 7% to $563M (excluding litigation reserve and transformation), driven by lower marketing spend timing, restructuring benefits, and disciplined discretionary cost management; company expects mid-single-digit decline in adjusted SG&A for the full year.
Negative Updates
GAAP Losses and Large Non-Recurring Charges
Reported Q3 operating loss of $150M and reported diluted loss per share of $1.01 driven by multiple nonrecurring items including a $99M litigation reserve, $75M of restructuring charges in Q3, and a $247M non-cash valuation allowance against certain U.S. federal deferred tax assets.
Footwear Weakness
Footwear remains a material drag: year-to-date footwear sales down ~14%; Q3 footwear revenue declined 12% with structural assortment issues cited as primary driver. Company is actively reducing low-productivity styles and consolidating franchises.
Top-line Pressure in North America and APAC
North America revenue declined 10% in Q3 (primary driver: wholesale weakness); APAC revenue decreased 5% (both reported and currency-neutral). North America is expected to decline ~8% and APAC ~6% for the full year.
Gross Margin Compression
Third-quarter gross margin contracted 310 basis points year-over-year to 44.4%, driven by ~180 bps of supply chain headwinds (including ~200 bps from higher U.S. tariffs), ~140 bps from pricing/promotional pressure in North America, and ~40 bps from unfavorable channel/regional mix.
Significant Litigation Reserve and Restructuring Runway
Recorded a $99M litigation reserve in Q3 related to an insurance carrier dispute; fiscal 2025 restructuring-related charges and transformation expenses total $224M to date (of which $89M cash), with total expected charges up to $255M by end of 2026.
E‑commerce and DTC Softness in Quarter
Direct-to-consumer revenue decreased 4% in Q3; e-commerce declined 7%—indicating ongoing softness in online sales despite improving conversion rates and digital engagement gains.
Pricing & Promotional Environment
Continued promotional pressures in North America and parts of EMEA weighed on pricing; management cited pricing headwinds as a contributor to margin decline and emphasized the need to protect brand pricing integrity.
Accounting/TAX Impacts Masking Underlying Results
A $247M non-cash valuation allowance against U.S. deferred tax assets and a favorable IRS tax method change (which created a ~ $0.06 EPS benefit in Q3) complicate GAAP comparability and highlight recent cumulative GAAP losses driven by restructuring and other non-operating items.
Company Guidance
Under Armour updated fiscal 2026 guidance and key Q3 metrics: full‑year revenue is now expected to decline ~4% (vs prior ‑4% to ‑5%), with North America down ~8%, APAC down ~6% and EMEA up ~9%; Q3 revenue fell 5% to $1.3B. Full‑year gross margin is expected to decline ~190 bps (Q3 GM was 44.4%, down 310 bps YoY) driven by ~180 bps of supply‑chain headwinds (including ~200 bps from higher U.S. tariffs), ~140 bps of pricing/promotional pressure and ~40 bps of unfavorable mix, partially offset by +30 bps FX and +20 bps product mix. Adjusted SG&A is expected to decline mid‑single digits (Q3 SG&A $665M, +4%; adjusted SG&A $563M, ‑7%); Q3 included a $99M litigation reserve and ~$78M of restructuring/transformation charges ($75M restructuring + $3M transformation). Adjusted operating income is expected at the top end of the $95M–$110M range (~$110M) with adjusted diluted EPS $0.10–$0.11; Q3 adjusted operating income was $26M and adjusted diluted EPS $0.09 (reported operating loss $150M, reported diluted loss per share $1.01, including a $247M non‑cash valuation allowance). Balance sheet metrics: inventory down 2% to just over $1.0B, cash $465M, $600M in restricted investments reserved for June note obligations, and $0 drawn on the $1.1B revolver. The company has incurred $224M of restructuring/transform expenses to date ($89M cash, $135M non‑cash), expects up to $255M total by end of 2026, realized $35M of savings in FY25 and is on track for an incremental ~$55M in FY26; a favorable tax method change contributed roughly $0.06 to Q3 EPS and the full‑year non‑GAAP tax rate is expected to be roughly in line with FY25.Under Armour Financial Statement Overview
Summary
Income statement trends are weak with TTM net losses, negative EBITDA margin, and shrinking revenue, outweighing a still-decent gross margin profile. The balance sheet is stable but leverage is meaningful and returns are negative due to losses. Cash flow is volatile and currently shows negative free cash flow, raising execution risk.Income Statement
Profitability has deteriorated meaningfully versus prior years. TTM (Trailing-Twelve-Months) shows a net loss (about -10% margin) and negative EBITDA margin, while revenue is shrinking. This is a clear downshift from 2023–2024 when the company was profitable with mid-single-digit net margins, despite already-softening growth. A still-solid gross margin profile helps, but the swing to operating losses and declining sales trajectory weighs heavily on the score.33
Negative
Balance Sheet
Leverage looks manageable but not conservative. In TTM (Trailing-Twelve-Months), debt is sizable relative to equity (roughly 0.9x), and returns on equity are negative due to losses. Equity remains positive and assets are stable, but the combination of higher leverage than ideal and weakening profitability reduces financial flexibility versus 2024–2025 annual periods that showed healthier equity returns.54
Neutral
Cash Flow
Cash generation is inconsistent. TTM (Trailing-Twelve-Months) operating cash flow is positive but very small relative to the net loss, and free cash flow is negative. This follows a pattern of volatility: strong positive free cash flow in 2024 and 2021, but negative operating/free cash flow in 2023 and 2025 (annual). Improving free cash flow growth in TTM is a positive signal, but the business is not currently translating operations into durable cash returns.40
Negative
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.98B | 5.16B | 5.70B | 5.90B | 5.68B | 4.47B |
| Gross Profit | 2.32B | 2.47B | 2.63B | 2.64B | 2.86B | 2.16B |
| EBITDA | -20.07M | 8.56M | 372.34M | 399.04M | 667.95M | 153.15M |
| Net Income | -519.71M | -201.27M | 232.04M | 374.46M | 360.06M | -549.18M |
Balance Sheet | ||||||
| Total Assets | 4.63B | 4.30B | 4.76B | 4.83B | 4.45B | 4.91B |
| Cash, Cash Equivalents and Short-Term Investments | 1.06B | 501.36M | 858.69M | 710.93M | 1.01B | 1.35B |
| Total Debt | 2.25B | 1.30B | 1.44B | 1.52B | 1.48B | 1.97B |
| Total Liabilities | 3.19B | 2.41B | 2.61B | 2.86B | 2.72B | 3.14B |
| Stockholders Equity | 1.44B | 1.89B | 2.15B | 1.97B | 1.73B | 1.77B |
Cash Flow | ||||||
| Free Cash Flow | -45.91M | -228.00M | 203.64M | -197.71M | 595.07M | 120.57M |
| Operating Cash Flow | 54.88M | -59.32M | 353.97M | -9.91M | 664.83M | 212.86M |
| Investing Cash Flow | -700.86M | -126.35M | -105.33M | -152.80M | -68.35M | 66.34M |
| Financing Cash Flow | 334.13M | -180.81M | -78.69M | -126.38M | -418.74M | 436.85M |
Under Armour Technical Analysis
Neutral
6.12
Price Trends
6.64
Negative
5.62
Positive
5.73
Positive
Market Momentum
-0.17
Positive
36.29
Neutral
13.50
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UAA, the sentiment is Neutral. The current price of 6.12 is below the 20-day moving average (MA) of 6.91, below the 50-day MA of 6.64, and above the 200-day MA of 5.73, indicating a neutral trend. The MACD of -0.17 indicates Positive momentum. The RSI at 36.29 is Neutral, neither overbought nor oversold. The STOCH value of 13.50 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for UAA.
Under Armour Risk Analysis
Under Armour disclosed 36 risk factors in its most recent earnings report. Under Armour reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Under Armour Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $20.69B | 15.13 | 34.74% | 0.93% | 12.32% | 29.40% | |
68 Neutral | $2.88B | 17.00 | 10.53% | 2.18% | 2.76% | -7.83% | |
64 Neutral | $2.85B | 215.89 | 6.99% | 0.22% | 0.52% | -45.80% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | $7.22B | 15.25 | 27.00% | 2.58% | -1.23% | 109.67% | |
55 Neutral | $2.57B | -1.23 | -29.46% | ― | -6.35% | -565.47% | |
53 Neutral | $6.41B | 6.01 | 14.79% | 1.95% | -3.12% | ― |
* Consumer Cyclical Sector Average
UAA
Under Armour
6.12
-0.35
-5.41%
COLM
Columbia Sportswear
55.00
-19.75
-26.42%
PVH
PVH
62.17
-2.54
-3.92%
RL
Ralph Lauren
341.62
119.30
53.66%
VFC
VF
16.38
0.50
3.16%
LEVI
Levi Strauss & Co
18.50
3.14
20.45%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.